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WASHINGTON: New applications for US jobless benefits fell by 89,000 last week after two weeks of increases but remain high as Covid-19 cases have spiked, according to government data on Thursday.
Applications fell to 803,000 in the week ended Dec 19 from an upwardly-revised 892,000 in the prior week, according to the seasonally-adjusted Labor Department data.
That was far below the level economists had been expecting, although analysts warn that the reports can be erratic due to seasonal adjustment errors around the holidays.
New claims for special pandemic jobless benefits – which are set to expire in days – fell by nearly 57,000 to 397,511, without seasonal adjustment.
President Donald Trump has threatened to veto the long-awaited pandemic relief bill that would extend the extra payments for workers who do not usually qualify.
In a video message on Tuesday, he demanded Congress amend the package finally approved after months of partisan wrangling to increase the direct relief payments from US$600 to US$2,000. (RM81,200).
As of Dec 5, 20.4 million jobless workers were receiving benefits, more than 14 million of those under special pandemic programmes that are due to expire, according to the report.
New jobless claims have increased in four of the past six weeks, indicating layoffs continued to be an issue for firms amid the worsening infection rate.
"While an easing of the pandemic is in view as the coronavirus vaccine comes online, the health situation is likely to remain dire for a few more months at least, weighing on the labor market and the economy more broadly," Nancy Vanden Houten of Oxford Economics said in an analysis.
Claims skyrocketed after business shutdowns to halt the spread of Covid-19 started in March, and have remained above the worst single week of the 2008-2010 global financial crisis ever since.
Congress passed the US$2.2 trillion CARES Act rescue package in the pandemic's early days, which created a number of programmes to expand the unemployment safety net.
The US$900 billion package approved late Monday night would extend those programmes.
As the programmes have begun to wind down, personal incomes fell 1.1% in November, the second straight monthly decline, the Commerce Department reported.
The data showed overall expenditures fell 0.4% compared to October, which follows a report earlier this month showing a sharp drop in retail sales.
"A rapidly worsening health situation, weakening income, depleted savings for lower income families and cooler weather led consumers to slam their wallets shut in November," economist Gregory Daco said.
And Ian Shepherdson of Pantheon Macroeconomics said: "A sustainable rebound in spending, however, will have to wait until the spring, and the lifting of Covid restrictions." – AFP
English (United States)