Jobless claims drop to still-high 900,000 in last full week of Trump presidency

Jobless claims drop to still-high 900,000 in last full week of Trump presidency

The numbers: The number of Americans who applied for jobless benefits fell in the last full week of Donald Trump’s presidency, but layoffs were still running at the highest level in months after a record coronavirus surge.

Initial jobless claims filed traditionally through the states declined by 26,000 to a seasonally adjusted 900,000 in the seven days ended Jan. 16, the government said Thursday.

Economists surveyed by Dow Jones/The Wall Street Journal had forecast initial jobless claims to total 925,000.

Another 423,734 applications were filed through a temporary federal-relief program.

Adding up new state and federal claims, the government received 1.38 million applications last week, based on actual or unadjusted figures. Combined claims have yet to drop below 1 million a week since last spring.

Before the pandemic, new claims were running in the low 200,000s and they had never risen by more than 695,000 in any one week.

The number of people already collecting state jobless benefits, meanwhile, declined by 127,000 to a seasonally adjusted 5.18 million.

Another 3 million who’ve run out of state benefits have shifted to the temporary federal program because they can’t find work. These numbers are likely to rise again in the coming weeks, however, after the federal program was reauthorized following a brief lapse.

What happened: Last week applications for jobless benefits fell the most Florida. California and Nevada both posted sizable increases.

Most other states reported smaller changes.

Restaurants and other businesses that have been laboring under new restrictions to slow the virus in states such as California and New York have had to lay off workers again.

Lots of temporary jobs also end after the holiday season is over.

Another factor: The government raised weekly jobless benefits again at the end of 2020, making it more attractive financially for unemployed workers to file claims. They are eligible for up to $300 extra in federal aid to go along with their state benefits.

While jobless claims have correctly reflected the rise and decline in unemployment during the pandemic, a government watchdog agency also found the number of distinct individuals applying for or collecting benefits has been inflated by 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 to pay attention to the direction of claims instead of the totals.

Read: Jobless claims inflated, GAO finds

Also: Why the inaccurate jobless claims report is still useful to investors

Altogether, the number of people receiving benefits from eight separate state and federal programs was reported at an unadjusted 15.9 million as of Jan. 2.

That was down 2.4 million from the prior week and marked the lowest level since the onset of the pandemic, but the decline likely reflected the disruption in federal benefits.

See: MarketWatch Coronavirus Recovery Tracker

Big picture: Layoffs have risen and hiring has declined since the coronavirus exploded to record highs at the end of last year. Companies are unlikely to accelerate hiring until the vaccines become more widespread and the pandemic begins to fade, an outcome that could take at least a few more months.

Read: The U.S. lost 140,000 jobs in December. How bad was it?

What they are saying? “Conditions are unlikely to improve until
infections can be curbed and the economy can reopen more completely,” said chief U.S. economist Rubeela Farooqi of High Frequency Economics.

Market reaction: The Dow Jones Industrial Average

and S&P 500

were set to open higher in Thursday trades.

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