The decline was the first in three weeks, despite a resurgence of Covid-19 cases. Economists warn of more job losses ahead.
New claims for unemployment benefits dropped for the first time in three weeks, the government reported Thursday, but the economy remains under pressure as Covid-19 cases surge and fresh restrictions on businesses loom in some states. The Thanksgiving holiday is likely to have delayed the filing of claims, and economists warn there will be more job losses ahead if the pandemic worsens. “It’s still bad,” said Diane Swonk, chief economist at the accounting firm Grant Thornton in Chicago, noting that recent job losses were broad and concentrated in industries that were hit hard early in the pandemic: food services, health care, retail establishments and hotels. Nearly 714,000 people filed initial claims for state unemployment insurance last week, compared with 836,000 the week before, the Labor Department reported. With seasonal swings factored in, last week’s total was 712,000. “People don’t apply as much when there are holidays,” Ms. Swonk added. “There is a natural falloff that occurs, but we just don’t know how big it was.” Ms. Swonk compared the effect to the drop in hospitalization data for the coronavirus that has been noted on Sundays and holidays. The Thanksgiving-related dip could be offset by belated claims when this week’s numbers are released. Almost 289,000 new claims were tallied under the Pandemic Unemployment Assistance program, which provides support to freelancers, gig workers, the self-employed and others not ordinarily eligible for unemployment insurance. Pandemic Unemployment Assistance is one of two emergency federal jobless benefit programs set to expire at the end of the month. Millions will be scrambling to make up for the lost aid, even as their reduced spending power dampens overall economic growth.
