Weekly jobless claims rise less than expected, but hold above 800,000
Jobless claims rose less than expected last week as employers weighed a wintertime spike in Covid-19 cases against expected relief from a pending $900 billion stimulus package, the Labor Department reported Wednesday.
The number of first-time unemployment-benefits filers decelerated to 803,000 in the week ended Dec. 19. Economists polled by Dow Jones expected initial claims to rise to 888,000.
Initial claims for the previous week were revised higher by 7,000 to 892,000, the highest print since early September.
Continuing jobless claims, a proxy for the number of people receiving benefits via regular state programs, fell to a seasonally adjusted 5.3 million in the week ended Dec. 12 from 5.5 million a week earlier, according to the Labor Department.
In all, 20.4 million Americans were receiving some kind of unemployment benefits through Dec. 5, the report said.
“With a new bill likely to be signed with extra benefits and an extension of them in terms of time, we’ll see how people manage the job opportunities available relative to the size of these benefits,” wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group.
“For those that can’t find work, the extra claims will obviously help them. Either way, come spring and summer we hope that we’ll see a sharp decline in all these numbers,” he added.
The newest jobless claims report came amid a dramatic showdown between President Donald Trump and U.S. lawmakers.
Earlier this week, Congress passed with veto-proof majorities a long-awaited, $900 billion relief package. The bill includes $600 stimulus checks to most individuals and their dependents, $300-per-week federal unemployment benefits and about $320 billion in business relief.
Democrats say the package is a step in the right direction but that they will advocate for more aid after President-elect Joe Biden takes office on Jan. 20.
“While we’re already hearing naysayers criticize the construction and composition, the bottom line is they’re dropping $900 billion of spending into households over the next few months, and that will absolutely support the economy,” Nathan Sheets, chief economist at PGIM Fixed Income, said in a note Tuesday about the latest legislation.
But in a stunning tweet Tuesday evening, Trump cast doubt on whether he would sign the bill, the product of months of negotiations by his own Treasury secretary, Steven Mnuchin.
Trump called the Covid relief bill an unsuitable “disgrace” and urged congressional leaders to make significant edits to the measure, including bigger direct payments to individuals and families.
The U.S. is recording at least 215,400 new Covid-19 cases and at least 2,600 virus-related deaths each day, based on a seven-day average calculated by CNBC using Johns Hopkins University data.
Data from The Atlantic’s COVID Tracking Project showed a record 117,000 people hospitalized with the virus.
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