WASHINGTON -- The number of Americans seeking unemployment benefits fell by 89,000 last week to a still-elevated 803,000, evidence that the job market remains under stress nine months after the coronavirus outbreak sent the U.S. economy into recession and caused millions of layoffs.
The latest figure, released Wednesday by the Labor Department, shows that many employers are still cutting jobs as the pandemic tightens business restrictions and leads many consumers to stay home.
Before the virus struck, jobless claims typically numbered around 225,000 a week before shooting up to 6.9 million in early spring when the virus -- and efforts to contain it -- flattened the economy. The pace of layoffs has since declined but remains historically high in the face of the resurgence of covid-19 cases.
"The fact that more than nine months into the crisis, initial claims are still running at such a high level is, in absolute terms, bad news," Joshua Shapiro, chief U.S. economist at the economic consulting firm Maria Fiorini Ramirez Inc., wrote in a research note. "With the pandemic again worsening, it is likely that claims will remain quite elevated for some time."
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The latest data on unemployment claims came on the same day that the government reported that consumer spending -- the principal driver of the economy -- fell in November for the first time since April. The 0.4% drop, coming in the midst of the holiday shopping season, added to concerns that weak consumer spending will slow the economy in coming months.
Also on Wednesday, the government said sales of new single-family homes sank 11% from October to November, though purchases remain up nearly 21% from a year ago.
Another report Wednesday showed that orders to U.S. factories for high-cost manufactured goods rose a moderate 0.9% in November, with a key category that tracks business investment plans showing a gain.
In its report on applications for unemployment aid, the government said the total number of people who are receiving traditional state benefits fell to 5.3 million for the week that ended Dec. 12 from a week earlier. That figure had peaked in early May at nearly 23 million. The steady decline since then means that some unemployed Americans are finding work and no longer receiving aid. But it also indicates that many of the unemployed have used up their state benefits, which typically expire after six months.
Millions more jobless Americans are now collecting checks under two federal programs that were created in March to ease the economic pain inflicted by the pandemic. Those programs had been set to expire Saturday. On Monday, Congress agreed to extend them as part of a $900 billion pandemic rescue package.
Those programs are for jobless people who have exhausted their regular state aid and another benefits program for self-employed and gig workers. The supplemental federal jobless benefit has been set at $300 a week -- half the amount provided in March.
On Tuesday night, though, President Donald Trump suddenly raised doubts about that aid and other federal money by attacking Congress' rescue package as inadequate and suggesting that he might not sign it into law.
HARD-HIT BUSINESSES
According to the data firm Womply, closings are rising in some hard-hit businesses. For example, 42% of bars were closed as of Dec. 16, up from 33% at the start of November. Over the same period, closures rose from 25% to 29% at restaurants and from 27% to 35% at salons and other health and beauty shops.
All told, 20.4 million people are now receiving some type of unemployment benefits.
States and cities have been increasingly issuing mask mandates, limiting the size of gatherings, restricting or banning restaurant dining, closing gyms or reducing the hours and capacity of bars, stores and other businesses, all of which have slowed economic activity.
Months from now, economists say, the widespread distribution and use of the vaccines could unleash a robust economic rebound as the virus is quashed, businesses reopen, hiring picks up and consumers spend freely again.
Until then, the limited aid Congress has agreed to won't likely be sufficient to stave off hardships for many households and small companies, especially if lawmakers balk at enacting further aid early next year. And a widening financial gap between the affluent and disadvantaged households will likely worsen.
'CHANGED MY LIFE'
Brandon Harvey spent Wednesday researching shelters that could take in his family. He and his wife lost their warehouse jobs in April in South Fulton, Ga. He's been getting $194 a week in unemployment, which isn't enough to pay the family's $1,300 rent. His landlord has filed for eviction. The family is two months behind on rent.
A father of two, Harvey cried over the weekend when he couldn't buy any presents for his older son's 13th birthday. Now the family is facing even bigger problems. They have only grapes and fruit juice left in their refrigerator.
"I am so stressed out. I'm not going to have a home in January," Harvey said. "This year has changed my life. I went from making $18 an hour to zero."
He said he watched Trump on Tuesday in shock.
"My message to Trump and Congress is, 'Please, please help us. Help Americans who need it," Harvey said. "I have always worked until this year. I work to take care of my kids."
Information for this article was contributed by Paul Wiseman and Julie Walker of The Associated Press; and by Rachel Siegel and Heather Long of The Washington Post.