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Americans continued to hit the unemployment line last week in large numbers as the continued surge in Covid cases added to America’s unemployment problem.
Unemployment claims totaled 900,000 for the week ended Jan. 16, the Labor Ministry reported on Thursday. This was slightly lower than the Dow Jones estimate of 925,000 and lower than the previous week’s revised downward total of 926,000.
Markets have reacted little to the news as President Joe Biden and Congress expected another large tax injection soon to help the economy weather the pandemic. Stock futures showed a modest gain on Wall Street.
Continuing claims showed a slight decline for the week, falling from 127,000 to 5.05 million.
Weekly claims tended to drop since they exploded in March and April in the early days of the pandemic, but started to drop again in October amid new trade restrictions.
The hospitality sector has been hit the hardest as hotels, bars, restaurants and casinos have been closed or forced to limit guest capacity. In January alone, the industry lost 498,000 workers.
The latest compensation claims report showed the total number of Americans receiving unemployment benefits continues to decline, although largely due to a decline in pandemic-related programs in late 2020. .
There were just under 16 million benefit recipients in the most recent data, compared to 18.4 million. However, the drop in pandemic-related claims will not last as the latest tax package includes extended benefits for displaced workers.
Several large states that had a heavier hand with the restrictions saw the rise in claims the previous week tempered. California (-58,665), New York (-12,212) and Pennsylvania (-9,638) all saw notable declines. The matches came from Arizona (15,347) and Illinois (13,948).
The morning’s other economic news was better than expected.
Housing starts totaled 1.67 million compared to the estimate of 1.56 million, while permits came in at 1.71 million against 1.61 million expected from Dow Jones. The Philadelphia Fed’s trade activity index jumped to 26.5, better than the estimate of 10.5.
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