The latest weekly initial jobless claims soared to 965,000 last week, according to data released Thursday by the Department of Labor, as the economy struggles to contain the fallout from rising coronavirus infection rates across the country.
Last week's figure is far higher than economists' forecasts of 800,000 claims, and is the largest total since Aug. 22, when the economy started a brief recovery over the summer. Initial jobless claims for the week ended Jan. 2 came in at 784,000.
First-time jobless claims have remained below 1 million for five straight months, after hitting a record total of 7 million in late March. However, the weekly figure continues to be four times higher than the pre-pandemic average.
"The race between vaccine distribution and mounting labor market damage continues," said AnnElizabeth Konkel, economist at Indeed Hiring Lab. "Even once vaccine distribution starts making a real dent in case numbers, it will still be a long road to a full economic recovery. Spring weather conditions will hopefully be a boost, allowing businesses and restaurants to again operate outdoors more easily."
Last week's monthly employment report from the Bureau of Labor Statistics showed a decline of 140,000 jobs for the month of December. It also showed a dramatic plunge in the leisure and hospitality sector, with restaurants and bar jobs down by almost half a million. However, as herd immunity is reached, there is some confidence that the service industry will improve, as customers return to dining and shopping.
With women making up the larger portion of the service sector, this demographic has been most affected by the pandemic-induced business closures. Additionally, the lack of child care and the requirements of remote schooling has added to the burden for women, driving them out of the workforce more broadly.
Ten months into the pandemic, the U.S. economy still has around 10 million jobs to recover, the unemployment rate remains at 6.7 percent and almost 19 million Americans are still claiming some form of unemployment benefit.
"Collectively, it may take many months to see the ranks of the long-term unemployed drastically shrink. As the pandemic drags on, so does the deep economic pain felt by millions," Konkel said.
President-elect Joe Biden will deliver remarks Thursday about his administration's planned vaccination and economic rescue package, including immediate relief to working families and communities hit hardest by the pandemic.
While the revamped Paycheck Protection Program, which reopened last week, should help some businesses and families stay afloat, there is still a need for further fiscal support, said Mark Hamrick, senior economic analyst at Bankrate.
“The prescription has been fairly consistently enunciated from the business community, as well as our central bankers, because they understand there’s only so much of a fulcrum they can lean on with monetary policy,” Hamrick said.
One obvious entry point is investment in the nation's infrastructure.
"A large-scale infrastructure bill would broaden the economy," and improve the situation for those demographics who have shouldered the greatest burden during the coronavirus pandemic, said Larry Fink, CEO of BlackRock, the world's largest asset manager.
"I can’t think of another more important thing," he told CNBC on Thursday morning.