While lawmakers in Washington remain deadlocked over a new fiscal relief package, the economy is sending signals that it needs more help. New jobless claims rose sharply to 853,000 last week, the Labor Department announced Thursday, the largest weekly number since September. Another 428,000 people applied for Pandemic Unemployment Assistance, the temporary federal program that aids self-employed and gig workers, bringing the total of initial claims to 1.3 million, an increase of 276,000 from the week before.
Some economists see the report as another sign that the economy needs a boost. “The jump in claims is consistent with our expectation that the next jobs report will likely deliver a negative print, reinforcing the need for immediate fiscal stimulus to support the economy,” Eliza Winger of Bloomberg Economics said.
“[L]ayoffs appear to be rising, consistent with the resurgent virus,” Heidi Shierholz of the Economic Policy Institute wrote, while also noting that “last week was the 38th straight week total initial claims were greater than the worst week of the Great Recession.”
Joseph Brusuelas, chief economist at the consulting firm RSM, noted that while the data may be distorted to some extent by the timing of the Thanksgiving holiday, “there is simply no rational case to be made that the underlying condition in the domestic labor market is improving as the pandemic intensifies. ... There are officially 9.8 million unemployed people, 19 million on some form of unemployment insurance and millions who have exhausted their benefits.”
“If it was not clear before, it is very clear now that this condition demands policy attention in the form of fiscal aid,” Brusuelas added.