Jobless claims preview: Another 880,000 Americans likely filed new unemployment claims last week
In the US states, probably about as many Americans filed new jobless claims in the past week as they did the previous week as more and more COVID-19 cases and new restrictions resulted in more people becoming unemployed.
The Department of Labor will publish its weekly report on new jobless claims on Wednesday morning at 8:30 a.m. (CET) or one day earlier than usual due to the Christmas break. Here are the key outcomes expected in the report versus the consensus estimates produced by Bloomberg:
First unemployment claims, week ending December 19: 880,000 expected, 885,000 in the previous week
Continued Claims Week Ending December 12: 5.560 million expected, 5.508 million the previous week
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Initial jobless claims for the week ending December 12 unexpectedly rose to a three-month high, triggering part of the recent labor market rebound as new virus cases, on-the-spot jobs and cold weather swept the country. This surge in new applications also came during the survey week for the Department of Labor's non-farm payroll report, suggesting that employment growth could slow further or even turn negative in the monthly report in early January.
"The recent surge in COVID cases has resulted in many states reintroducing lockdown measures and other business restrictions that are likely to affect labor market recovery in the short term," Deutsche Bank economists, led by Matthew Luzzetti, said Monday in a message. "We have already begun to see some evidence of this in the radio frequency data, with changes in a state's unemployment claims increasingly correlating with the state's growth in COVID cases."
"As COVID cases continue to rise, attitudes will likely continue to slow and could even reverse," they added.
Meanwhile, economists also expect a modest spike in persistent jobless claims this week, which will capture the total number of Americans still receiving government unemployment benefits. And an increasing number of Americans have recently embarked on longer-term federal unemployment programs as well: Last week, nearly 1 million Americans began raising pandemic unemployment benefits or pandemic unemployment benefits, both as part of the spring Congressional virus relief package.
These federal emergency programs were renewed in the newly approved US $ 900 billion stimulus package, meaning the total of more than 14 million Americans who participate in these programs will prevent a loss of performance that will continue until the end of the year Relief would have come. The new package also includes an additional $ 300 increased weekly unemployment benefit. These payments amount to half the amount provided for in the Aid, Aid and Economic Security Act (CARES) of Congress earlier this year.
Some economists, as well as many Democratic lawmakers, have stated that the stimulus package does not go far enough to support the millions of Americans who are still unemployed due to the pandemic. Importantly, however, the new aid package, at least until more aid can be discussed in Washington for next year, also includes hundreds of billions of dollars in funding for the paycheck protection program, which small businesses across the country can likely use to keep some workers on theirs Payrolls.
"The single biggest component of the new COVID relief bill is the $ 284 billion total paycheck protection program refinancing," Pantheon Macroeconomics chief economist Ian Shepherdson said in a note on Monday. “The new funding for the PPP is enough to save 4.75 million jobs over a year, other things are the same. We don't yet know how long the program will run. "
“With Homebase's alarming daily data now in free fall, this can't be a second premature, although the reality is that companies may not be able to apply for the new program for a few weeks. "He added." Still, it is a huge step forward that will help bridge the gap between the third wave ravaged service economy and the post-pandemic world of spring. "
This post will be updated with the results of the Labor Department's weekly unemployment report on Wednesday morning at 8:30 a.m. (CET). Check for updates again.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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