New US jobless claims rise sharply as states tighten Covid restrictions


The pace of new US jobless claims accelerated to 853,000 last week, after a fresh surge in coronavirus cases spurred a new round of shutdowns that has stymied the labour market’s recovery.

Initial applications for unemployment benefits had increased from a seasonally adjusted 716,000 in the previous week, the US labour department said on Thursday. Economists were expecting a smaller rise to 725,000 claims.

There were 5.76m Americans actively collecting state jobless aid as of November 28, compared with 5.53m a week earlier and bucking economists’ expectations for another decline. The insured unemployment rate, considered an alternative measure of joblessness, rose to 3.9 per cent from 3.8 per cent.

Continuing claims had fallen for 10 consecutive weeks, from 12.7m in mid-September, although economists partly attributed the decline to unemployed workers exhausting regular benefits.

Pandemic Unemployment Assistance, a Cares Act programme that offers benefits to the self-employed and others who would not qualify for regular benefits, received 427,609 new claims last week on an unadjusted basis, compared with 288,234 a week earlier.

The US added 245,000 jobs in November, the slowest rate of hiring since a combined 22m jobs were lost in March and April during the height of early coronavirus-related shutdowns. The economy has now recouped 12.3m jobs.

Lawmakers in Washington have rekindled talks to provide further economic aid, at a time when jobs growth has slowed and many states have reimposed curbs on businesses after a rise in infections and hospitalisations.

Republicans and Democrats remain divided on the details of a stimulus package. The White House offered a $916bn package, larger than a $908bn bipartisan proposal, but which cut the amount of federal unemployment benefits and added stimulus cheques of $600 per person. Democratic leaders said they opposed the reduction in jobless aid.

The jobless claims report showed that 19m people were claiming benefits in all state and federal programmes as of November 21, down from 20.2m, according to unadjusted figures that are reported on a two-week delay. 

In other economic data, consumer prices ticked up 0.2 per cent in November against the previous month. The consumer price index was flat in October.



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