After a brief reprieve due to seasonal hiring, the latest weekly initial jobless claims total 787,000, according to data released Thursday by the Department of Labor. Analysts had predicted claims for the week ending Jan. 2 would total 803,000.
President Donald Trump signed a $900 billion emergency relief package last month that included an extension of unemployment insurance benefits. The additional $300 in weekly benefits will continue until March 14, along with two other pandemic programs.
That boost is likely to juice consumer spending and lift business sentiment moving forward, increasing the demand for labor. However, there are still 10 million jobs yet to be recovered, the bulk of which may not return until 2023, economists predict.
“We see still heartbreakingly elevated levels of new unemployment claims, with more than 19 million Americans recently receiving some form of jobless assistance," said Mark Hamrick, senior economic analyst at Bankrate. "One can take only a modest amount of solace from the fact that a fresh round of unemployment assistance was approved, meaning that those most in need weren’t pushed over a cliff after Christmas."
“This week’s dramatic events in Washington may have forced an elevation of the middle ground and a reckoning of understanding that constructive solutions are needed to address the pandemic and economy-boosting measures including infrastructure funding,” Hamrick said.
Thursday's numbers come one day after a report from payroll processing company ADP, which showed the total number of people employed fell in December for the first time since April. Payrolls fell by 123,000 last month, compared to forecasts of an increase of 60,000.
The winter season is expected to bring a sharp increase in the already record totals for coronavirus infection rates and hospitalizations, after many Americans chose to travel and attend family gatherings over the holidays, despite the Centers for Disease Control and Prevention urging people to avoid gatherings and limit travel.
Arizona, California and Rhode Island are now among the hardest-hit places in the entire world, according to a data analysis by NBC News, foretelling the challenges that lie ahead.
Focus now turns to Friday's closely watched jobs report, the last employment snapshot under Trump, which is expected to show the lowest monthly total since April. Economists forecast that just 50,000 jobs were added for the month of December and the unemployment rate rose to 6.8 percent.
“While the job market prospects for 2021 are brighter, it will take the first half of the year for that momentum to build. Elevated unemployment will be with us long after the virus is vanquished,” said Greg McBride, chief financial analyst for Bankrate.