A woman walks past a closed retail store for rent in downtown Manhattan on January 25, 2021 in New York City.
Angela Weiss | AFP | Getty Images
The number of Americans applying for unemployment benefits for the first time rose less than expected last week as the Biden government took over the introduction of the Covid vaccine and employers hoped for additional financial support from Congress.
Unemployment claims stood at 847,000 for the week, the Labor Department reported Thursday. Economists polled by Dow Jones had expected 875,000 claims for the first time. The previous week’s level has been revised by 14,000 from 900,000 to 914,000.
Persistent claims saw a 203,000 decrease to 4.77 million, a new low in the pandemic. Around 5.05 million ongoing claims were expected. US stock futures rose ahead of Wall Street’s opening bell.
However, the latest claims report showed that the number of Americans receiving unemployment benefits actually rose to 18.28 million, up 2.29 million from the previous week. This increase is related to the last tax package passed in December, which included expanded benefits for displaced persons.
The recovery in consumer spending, which had revived employment and economic growth in the summer and fall, showed signs of weariness as household spending fell in November for the first time in seven months.
This slowdown, presumably due to colder weather and record-breaking Covid cases, has resulted in a number of unexpectedly high jobless claims and stagnating unemployment figures.
State and local governments have reintroduced business restrictions in some locations to help slow the spread of the virus that has hit hotels, bars, restaurants and casinos hard. In January alone, the industry lost 498,000 employees.
Initial claims were 926,000 in the week ending January 9, the highest since August.
President Joe Biden and his administration cited the anemic employment reports to highlight the urgency of a proposed $ 1.9 trillion stimulus package.
The president’s plan would include a number of provisions that could help unemployed Americans until the job market recovers and vaccines become more widely available.
Biden’s plan includes direct payments of $ 1,400 per person to most households, weekly unemployment insurance of $ 400 through September, an expanded child tax credit, and a minimum wage of $ 15 an hour.
Investors also got their first look at fourth-quarter GDP on Thursday, which showed the US economy grew 4% on an annualized basis over the last three months of 2020.