The numbers: The number of Americans filing for unemployment benefits skyrocketed in early January to a five-month high of nearly 1 million as more workers lost their jobs due to coronavirus-induced business closures and restrictions. Initial jobless claims traditionally filed across states increased by 181,000 to 965,000 seasonally adjusted in the seven days ending Jan. 9, the government said Thursday. It was the highest level since August.
Unemployment claims surge to 5-month high of 965,000 after coronavirus-related layoffs
Economists polled by Dow Jones and the Wall Street Journal had forecast initial jobless claims at a total of 800,000. Another 284,470 applications were submitted through a temporary federal aid program. Read: When Will Unemployed Americans Get Their Extra $ 300 in Benefits? Adding new state and federal applications, the government received 1.44 million applications last week, based on actual or unadjusted figures. The combined claims have yet to drop below 1 million a week since last spring. While jobless claims have correctly reflected the rise and fall of unemployment during the pandemic, a government watchdog also found that the number of different people applying for or collecting benefits has ballooned due to fraud, double counting, and other problems. The Bureau of Labor Statistics is taking steps to improve the data, but for now the claims report is not considered entirely accurate. Economists say pay attention to the direction of claims rather than totals. Read: Unemployment benefits claims were inflated, according to GAO. They also increased in Kansas and California. New jobless claims have receded in recent months. They had fallen to a pandemic low of 711,000 in November before a record spike in coronavirus cases forced more businesses to close or cut hours. That triggered the first decline in employment in December since the early stages of the pandemic. Meanwhile, the number of people already receiving state unemployment benefits increased by 199,000 to 5.07 million seasonally adjusted. However, millions of people who have lost state benefits have simply switched to the temporary federal program because they cannot find work. Continuing claims funded by the federal government totaled 4.2 million in the week ending Dec. 26, the latest data available. In total, the number of people receiving benefits from eight separate state and federal programs was reported at 18.4 million unadjusted as of Dec. 26. That was 744,511 less than the previous week and marked the lowest level since the start of the pandemic last spring. However, those numbers are also in dispute. The government’s most comprehensive monthly employment report indicated that 10.7 million people were unemployed at the end of December. Economists say the actual number of unemployed is likely in the middle. The Big Picture: The biggest threat to the economy from the latest coronavirus outbreak is the damage it has done to hiring and jobs. Many jobs could be lost permanently if the pandemic lasts much longer. Additional financial assistance from Washington will help, but it can only do so much if Americans are too afraid to go out or are prevented from doing so by government restrictions. See: MarketWatch Coronavirus Recovery Tracker Market reaction: The Dow Jones Industrial Average DJIA, -0.03% and S&P 500 SPX, + 0.23% were set to open higher in trading on Thursday.