WASHINGTON - Unemployment compensation claims jumped sharply in the United States last week, the U.S. Labor Department reported Thursday, as the soaring number of coronavirus cases in the country wreaks havoc on the world's largest economy.
The government said 965,000 workers filed for benefits last week, up 181,000 from the revised figure of the previous week. It was the biggest number of claims in several weeks and followed a report last week that U.S. employers cut 140,000 jobs in December, the first drop in job growth since the pandemic swept into the U.S. last March and April and sent the national economy reeling.
Now, as President-elect Joe Biden gets set to be inaugurated January 20, the U.S. economy is facing new headwinds, with tens of thousands of people being infected daily and employers confronted with new orders from state and municipal officials to restrict business hours or to shut down to try to prevent the spread of the virus.
Until last week, the number of jobless benefit claims had stayed steady in the 700,000 to 800,000 range, well below the 6.9 million record number of claims filed late last March as the pandemic took hold in the U.S. Still, all of the weekly jobless benefit claim figures in the last 10 months have been above the highest pre-pandemic level in records going back to the 1960s.
The national government has started to make $300-a-week extra payments to the jobless on top of less generous state benefits, a stipend that will last for 11 weeks. Biden could seek to boost that figure in a new relief package he is planning to outline Thursday night.
But it took months for the outgoing administration of President Donald Trump and fractious lawmakers in Congress to reach a deal on a $900 billion coronavirus relief measure that included the jobless aid, suggesting that any new spending might also be tough to negotiate.
Nearly 10 million of the 22 million workers who lost jobs remain unemployed in the U.S. The jobless rate was 6.7% in November, and many economists say the figure could remain elevated for months.
U.S. employers have called back millions of workers who were laid off during business shutdowns earlier this year. Some hard-hit businesses have been slow to ramp up their operations again or have closed permanently, leaving workers idled or searching for new employment.
Now, however, some state and municipal officials have imposed new restrictions on businesses, forcing owners to once again lay off workers.
Biden has called the $900 billion aid package enacted last month "a down payment" and says he will seek more coronavirus relief spending when he takes office.
With Democrats winning both Senate runoff elections a week ago in Georgia, Biden will have narrow majorities in both the Senate and House of Representatives, possibly easing approval of his plans, but only if Democrats vote as a bloc.
The aid pact Trump signed includes $600 payments to more than 80% of adult Americans, excluding the biggest wage earners.
Democrats and Trump had called for increasing the amount to $2,000 but were blocked by Republican lawmakers who said the additional aid was too costly. With Democrats controlling the levers of power in Congress and the White House after Biden takes office, more aid could be approved as the death toll from the coronavirus mounts.
While the U.S. economy has regained strength since the earliest days of the coronavirus pandemic, growth slowed in the last three months of 2020. The U.S. has now recorded 384,000 coronavirus deaths and 23 million infections, both figures higher than in any other country, according to Johns Hopkins University.
Economists, meanwhile, expect the U.S. economy's recovery to gain momentum in the second half of 2021, after passage of the December stimulus package and as millions of people are eventually inoculated against the disease.
More than 10.8 million Americans have been vaccinated so far, but the figure is still far short of the 20 million the Trump administration predicted would get the shots by the end of December. More than 762,000 people have received the required two doses of one of the two vaccines that are available in the U.S.