Initial jobless claims climbed to 853,000 last week after experiencing a drop amid the Thanksgiving holiday, marking it the highest weekly total since mid-September.
The number of new applications for unemployment insurance jumped by more than 100,000 for the week ending Dec. 5, from a revised total of 716,000, the Labor Department reported Thursday. Economists surveyed by Dow Jones anticipated the seasonally adjusted number to be 730,000.
Non-seasonally adjusted claims also surged to nearly 950,000.
“This is a very bad sign for the labor market,” Dr. David Berger, associate professor of economics at Duke University, said. “It suggests businesses are cutting back because sales are slowing due to the third wave of the pandemic.”
The report comes as the United States just closed in on its highest single-day death count of more than three thousand coronavirus-related deaths and hospitalizations across the country are near full capacity, forcing state and local governments to implement tight restrictions to combat the rapid spread of the deadly disease.
Continuing claims also jumped to 5.76 million, which is the first time the figure increased in almost four months.
“Even more worrisome is the number of people who have been unemployed for a long time has increased. All signs suggest that the recovery just keeps getting slower and slower,” Berger said. “Normally, seasonal hiring for the holiday season would help, but that is not going to save us this time due to the pandemic.”
In addition to typical unemployment insurance filings, another 427,609 workers applied for the Pandemic Unemployment Assistance program, formed in the Cares Act in March, which offers jobless benefits for Americans who don’t qualify for normal unemployment aid.
Roughly nineteen million Americans are reportedly collecting some form of unemployment insurance.
The Cares Act pumped federal funds into the pockets of unemployed Americans, as the legislation provided $600 weekly jobless bonuses and established government programs for those who aren’t covered under traditional unemployment initiatives. The programs, however, have either expired or are set to expire by year’s end, and economists urge Congress to pass another round of economic relief to avoid further financial strain on households, small businesses and the economy.
“The labor market has stopped improving—and is likely to worsen considerably in the new year absent a new relief package,” Dr. Jonathan Gruber, a former technical consultant to the Obama administration and economics professor at the Massachusetts Institute of Technology, said.
Roberto Chang, economics professor at Rutgers University, echoed Gruber’s remarks, adding that “Households and small businesses that are suffering significant income losses may need financial assistance now before such losses, which have been temporary due to the pandemic, become permanent” due to situations like “bankruptcies” and “job destruction.”
Negotiations over another stimulus package reignited after a group of moderate lawmakers unveiled a $908 billion compromise plan that includes $300 in weekly jobless benefits and no stimulus checks. Top congressional Democrats endorsed the proposal last week, but Senate Majority Leader Mitch McConnell (R-Ky.) hasn’t announced his support for the bill. The White House also released a package that offers $600 direct payments but doesn’t include unemployment insurance.
But Chang also said that “there may be hope for a strong recovery,” considering new developments in the coronavirus vaccine and a change in government, but noted there is “considerable uncertainty” about the “long-term damage” of the seething pandemic.
“It is crucial that we act now,” Berger said. “Once people have been laid off or businesses file for bankruptcy, it becomes harder to put back the pieces. It is essential that the federal government act now so that the US can have [a] very successful 2021.”
Rachel Bucchino is a reporter at the National Interest. Her work has appeared in The Washington Post, U.S. News & World Report and The Hill.