Unemployment claims slip to still-high 787,000
The number of Americans seeking unemployment aid fell slightly to 787,000, evidence of a job market stumbling in the face of the viral pandemic and the damage it has inflicted on the economy for nearly 10 months.
Thursday’s figure from the Labor Department, a slight decline from the previous week, showed that many employers are still cutting jobs as the pandemic tightens business restrictions and leads anxious consumers to stay home.
At the same time, the number of people who are receiving regular state unemployment aid fell 125,000 to 5.1 million. And fewer people were on extended unemployment benefit programs.
On Friday, the government will likely issue a gloomy jobs report for December. Economists expect it to show that hiring slowed for a sixth straight month — and possibly that employers shed positions for the first time since the job market collapsed in April just after the pandemic erupted.
Unemployed Americans gained some urgently needed help late last month when a $900 billion rescue aid package was signed into law. That measure provided a $300-a-week federal jobless benefit on top of an average state benefit of about $320. As many as half the states are now distributing the federal benefit, according to an unofficial tally at UnemploymentPUA.com. In states that take longer to pay out the $300 payments, any missed payments can be made retroactively.
The federal extension of benefits was lengthened to 24 weeks by the congressional legislation. That program will remain in place until mid-March. A separate program that provides jobless aid to contractors and gig workers who previously weren’t eligible was also extended for 11 weeks. Both benefits had briefly expired Dec. 26, temporarily cutting off all aid for 10 million jobless Americans.
The Labor Department said this week that despite President Donald Trump’s delay in signing the relief package — he did so six days after Congress’ approval — jobless benefits under the extended programs that lapsed Dec. 26 should be paid out without interruption.
The continued weakening of the U.S. job market coincides with other signs that hiring and economic growth are faltering under the weight of the pandemic. On Wednesday, payroll processor ADP reported that private employers shed 123,000 jobs in December, the first such monthly decline since April. ADP’s figures generally track the government’s jobs data over time, though they can diverge significantly from month to month.
In November, consumer spending — the lifeblood of the economy — declined for the first time in seven months, having steadily weakened since summer. Retailers have been especially hurt. Purchases at retail stores have dropped for two straight months.
During the holiday shopping season, consumers pulled back on spending, according to debit and credit card data tracked by JPMorgan Chase based on 30 million consumer accounts. Such spending was 6% lower in December compared with a year ago. That was worse than in October, when card spending was down just 2% from the previous year.
COVID-19 Economy FAQs
Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?
This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.
Could waiving patents increase the global supply of COVID-19 vaccines?
India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
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