Americans continued to hit the unemployment line in large numbers as the continued spike in Covid cases added to America’s unemployment problem last week.
Unemployment claims stood at 900,000 for the week ended January 16, the Labor Department reported Thursday. That was slightly less than the Dow Jones estimate of 925,000 and below the previous week’s revised downward total of 926,000.
Markets have made some bigger gains on the data, and given continued expectation that President Joe Biden and Congress will soon deliver another major financial infusion to support the economy through the pandemic. Stock futures indicated a modest profit on Wall Street.
Sustained accounts receivable declined slightly over the week, falling 127,000 to 5.05 million.
Weekly claims have tended to be lower since the explosion in March and April in the early days of the pandemic, but began to rise again in October due to renewed business restrictions.
The hospitality industry is hardest hit, as hotels, bars, restaurants and casinos have either closed or forced to limit guest capacity. In January alone, the industry lost 498,000 employees.
The latest claims report showed the number of Americans receiving unemployment benefits continued to decline, though this was mainly due to a decline in pandemic-related programs towards the end of 2020.
In the latest data, there were nearly 16 million beneficiaries, compared with 18.4 million. However, the decline in pandemic-related entitlements will not last as the latest tax package includes expanded benefits for displaced persons.
In several large states that had a heavier hand with restrictions, the rise in claims in the previous week was mitigated. In California (-58,665), New York (-12,212) and Pennsylvania (-9,638) significant declines were recorded. Profits came from Arizona (15,347) and Illinois (13,948).
Other business news for the morning was better than expected.
Housing starts were 1.67 million versus the estimate of 1.56 million while permits were 1.71 million while Dow Jones was expecting 1.61 million. The Philadelphia Fed’s Business Activity Index rose to 26.5, better than its estimate of 10.5.