US unemployment claims surge as Covid-19 cases ravage economy and jobs
The number of Americans filing first-time applications for unemployment benefits surged last week, cementing concerns of a woeful jobs market, as a worsening Covid-19 pandemic disrupts operations at restaurants and other businesses.
Initial claims for state unemployment benefits totaled a seasonally adjusted 965,000 for the week ended 9 January, compared to 784,000 in the prior week, the Labor Department said.
Economists polled by Reuters had forecast 795,000 applications in the latest week.
Claims were also likely lifted by reapplications for benefits following the government’s renewal of a $300 unemployment supplement until 14 March as part of nearly $900bn in additional relief approved at the end of December.
Government-funded programs for the self-employed, gig workers and others who do not qualify for the state unemployment programs as well as those who have exhausted their benefits were also extended.
Authorities in many states have banned indoor dining to slow the spread of the coronavirus.
The economy shed jobs in December for the first time in eight months.
Neil Birrell, chief investment officer at Premier Miton Investors, said of the numbers:
“The US initial jobless and continuing claims came in way worse than expected. Employment is a crucial indicator of the economy and it has not been giving many positive signals for a while now. This is a step backwards.
“Even if there are anomalies in the data it looks like the virus is increasing in its impact.”
Birrell added: “The Biden Covid relief package will need to be big and come soon; markets will demand it.”