Unemployment claims held steady to start the new year, WSJ reports.
Weekly Initial Claims For Jobless Benefits: A seasonally adjusted 787,000 (3,000 Decrease) for the week ending Jan. 2.
Why It Matters: Jobless claims have been up throughout the pandemic, with current numbers holding steady at about 800,000, four times the pre-pandemic average. It’s fallen significantly from a peak of almost seven million in the spring, which came around the time states were issuing state-at-home orders. With states enacting new restrictions and cases and hospitalizations surging, there is renewed pressure on the economy.
North Carolina A&T State Economist Alfred Romero: “The economy is at a bigger crossroads now than we were last fall. It’s now a race between the speed of vaccinations and the speed of contagion.”
The $300-per-week in added benefits rolling out, as part of the $900 billion Covid-19 relief bill signed on Dec. 27, could be incentivizing more workers to apply.
- However, some may not have applied during the holidays, and “workers aren’t required to apply for benefit the week they are laid off.”
- Jobless claims numbers can also be volatile during the holiday periods because of seasonal adjustments.
Looking Ahead: The Labor Department will release a more detailed look at the December jobs market on Friday. Economists project the report will show employers added 50,000 jobs in December. That would be the smallest gain since April when the economy dropped 20 million jobs.
It looks like we got a blue sweep after the Georgia election results, so I imagine there will be higher amounts of stimulus over the coming year than otherwise. This should help keep consumer spending and equity markets at decently high levels, although we have yet to see what the long-term damages might be.