Financial report: Jobless claims are falling under 800,000, however layoffs within the US are nonetheless excessive after the file coronavirus outbreak

The payment: New claims for state unemployment benefits fell slightly around Christmas, falling below 800,000 for the first time in a month, but the record coronavirus outbreak is still weighing heavily on the labor market and throwing more people off work.

Initial jobless claims, traditionally filed through the states, fell by 17,000 to 787,000 in the seven days ended December 26, the government said Thursday.

Economists surveyed by MarketWatch had forecast that initial jobless claims would be 835,000, seasonally adjusted.

The decrease may be due to people waiting to claim benefits after their vacation. Uncertainty about whether Congress would approve expanded unemployment benefits before they expired by the end of the year may also have played a role.

However, the weekly job loss is still extremely high.

Another 308,262 benefit claims were filed last week as part of a federal temporary aid program created during the pandemic. The total number of new claims last week was 1.15 million. The combined claims still have to fall below 1 million per week.

President Trump signed a bill last week that extends unemployment benefits for unemployed Americans, increasing payments by up to $ 300 a week. Benefits could have been cut for millions of people if Washington had not acted, and some could still face payment delays.

Read: When do unemployed Americans get their additional $ 300 benefits?

While unemployment claims correctly reflect the rise and fall in unemployment during the pandemic, a state surveillance agency also found that fraud, double counting and other issues have increased the number of people claiming or receiving benefits.

Read: Unemployment claims inflated, GAO notes

The Bureau of Labor Statistics is planning action to improve the data, but the damage report is not currently believed to be entirely accurate. Economists say to look at the direction of the claims rather than the totals.

Read: Why the inaccurate unemployment claims report is still useful to investors

What happened: The number of new jobless claims in the states had fallen to a pandemic low of 711,000 in early November before falling back to over 800,000 due to a record spike in coronavirus cases. It is likely that they will remain elevated until the recent coronavirus surge subsides.

Initial claims fell the hardest last week in Illinois, Texas, Florida and Georgia.

The largest increases were in California and New York, as was the case throughout the pandemic. Kentucky also reported a sharp increase.

Meanwhile, the number of people already receiving government unemployment benefits fell by 103,000 to a seasonally adjusted 5.22 million. This is a new pandemic low.

Yet millions of people running out of government benefits have simply moved on to a temporary federal aid program because they still cannot find work. The ongoing claims financed by the federal government hardly changed in the week ending December 12, at 4.77 million. This is the latest available data.

Applications for federal unemployment benefits have more than tripled since August, due to the increasing hardship of many people who have permanently lost their jobs.

Overall, the number of people receiving benefits from eight different state and federal programs stood at an unadjusted 19.6 million as of December 12. This corresponds to a decrease of almost 800,000 compared to the previous week.

However, these numbers are also controversial. The government's more comprehensive monthly employment report shows that far fewer than 10.7 million people were unemployed at the end of November.

Economists say the true number of unemployed is likely to be in the middle.

Read: US consumer confidence fell in December

Big picture: The economy has clearly suffered another setback from the coronavirus pandemic and it is possible that December employment could shrink for the first time since the pandemic began last April, when monthly data is released in early January.

Another round of government aid will help unemployed Americans and businesses in trouble get through the next few months, but the economy will not generally recover until the vaccines spread further and the epidemic subsides.

See: MarketWatch Coronavirus Recovery Tracker

What do you say? "Initial jobless claims fell slightly, but at such a high level and with such high error rates they are essentially at a painful, inflated level due to the rise in the coronavirus," said Robert Frick, corporate economist with the Navy Federal Credit Union.

"And as long as this surge continues despite the incentives, we can expect more than 1 million Americans to lose their jobs every week as a result of state and federal measures."

Market reaction: The Dow Jones industrial average
+ 0.24%
and S&P 500
+ 0.13%
opened slightly lower on Thursday, the last trading day of the year. The trading volume should be low.

The weekly claims report will be the last the government will publish in 2020. The markets are closed on Friday for the New Year holidays.

Related Articles