WASHINGTON (Reuters) – The number of Americans filing applications for unemployment benefits for the first time increased last week, confirming the weakening of the labor market’s status as a worsening COVID-19 epidemic. Which disrupt operations at restaurants and other businesses.
The large increase in weekly unemployment claims reported on Thursday by the Department of Labor was expected by some economists, driven by the recent renewal of supplementary employmentless benefits, but still job losses in January following a slowdown in nonfarm trolls. The danger increased. December for the first time in eight months.
Stalling labor market recovery could put pressure on the incoming Biden administration for a major relief package. Joe Biden will take over from President Donald Trump next Wednesday. He is expected to propose an incentive of more than $ 2 trillion on Thursday. The government approved about $ 900 billion in additional relief in late December.
MUFG Chief Economist Chris Roopkey in New York said, “The economy clearly needs additional support from Washington because the soaring unemployment claims suggest that the labor market recovery has stalled and the direction is completely tilted.”
Initial claims for unemployment benefits in the state rose to 181,000, a seasonally adjusted 965,000 for the week ending January 9, the highest at the end of August. Economists polled by Reuters estimated 795,000 applications in the latest week.
Unclaimed claims last week totaled 1.151 million from 231,335. Economists prioritized inappropriate numbers due to earlier difficulties in adjusting data for seasonal fluctuations claims due to the economic trauma caused by the epidemic. 1.4 million people filed claims last week, including government-funded programs for self-employment, gig workers and others who do not qualify for regular state unemployment programs.
Federal Reserve Chairman Jerome Powell said Thursday that the economy was far from the US central bank’s inflation and employment targets. Powell said in a web seminar with Princeton University that the Fed talked about changing its monthly bond purchases too soon to be part of an array of measures it has deployed to help the economy.
Stocks traded higher on Wall Street. The dollar fell against a basket of currencies. US Treasury prices were low.
Last week’s claims are also likely to increase, with people likely to reapply for benefits after the renewal of the $ 300 unemployment supplement by March 14 as part of the latest stimulus package. Government-funded programs for self-employed, gig workers and others who are not eligible for state unemployment programs, as well as those who have exhausted their benefits, have also been expanded.
“Not all people are eligible for unemployment assistance that actually claims benefits, and add an incentive to file for supplemental payment benefits,” said Nancy Vanden Houghton, lead American economist at Oxford Economics in New York We do.
Authorities in several states have banned indoor food to slow the spread of coronovirus. The economy shed jobs in December for the first time in eight months.
The Federal Reserve’s Beige Book report about business activity collected from nationwide contacts in early January showed Wednesday that “contacts in the leisure and hospitality sectors have reported employment cuts due to strict containment measures.”
The central bank also said that the resurgence in coronaviruses was causing staff shortages in the manufacturing, construction and transportation sectors. The virus has infected more than 22.5 million people in the United States and killed more than 376,188 people in any country.
Although jobless claims fell to a record 6.867 million in March, they remained above their 665,000 peak during the Great Recession of 2007–09. Economists say the labor market may take several years to recover from the epidemic.
The claims report showed the number of people receiving benefits increased from 199,000 to 5.271 million after the initial week of aid in late January. 2. At the end of December all programs had at least 18.4 million unemployment benefits.
Labor market tensions kept inflation under control amid rising price pressures. The Labor Department said in a separate report on Thursday that import duties jumped 0.9% in December after rising 0.2% in December. Import prices were increased by higher prices for energy products and more recently the weakness of the dollar.
Economists had estimated import prices, which exclude tariffs, up by 0.7% in December. During the 12 months in December, the import price slipped 0.3% after falling 1.0% in November.
Joel Naroff, chief economist at Naroff Economics of Holland, Pennsylvania, said, “Prices are moving upward, but inflation is unlikely to affect the economy due to the labor market not improving.”
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Rikki