Around 900,000 Americans filed for initial jobless claims last week, versus economists’ projections of 925,000, according to the first labor market data released under President Joe Biden.
First-time weekly jobless claims, a proxy for layoffs, have exceeded 750,000 a week since summer, and surged to a revised 926,000 for the week ended Jan. 9 as rising coronavirus cases continue to keep consumers home and businesses under restrictive measures.
The elevated figures reflect the intensity of the damage that the virus has inflicted on the labor market — and the enormity of what Biden must now tackle. Around 44 weeks into the pandemic, almost 16 million people continue to receive some form of unemployment assistance.
“Both the magnitude and direction of the total initial claims remain a problem, with no substantial improvement since late summer,” said AnnElizabeth Konkel, economist at Indeed Hiring Lab. “Millions are exhausting one unemployment program and rolling onto another in real time, underscoring that the coronavirus is still actively damaging large swaths of the economy.”
Biden last week outlined a $1.9 trillion emergency stimulus package that includes a fresh round of stimulus checks to help millions of struggling Americans pay for their home and put food on the table. His plan includes $1,400 per person in direct payments and a $400-a-week federal unemployment insurance program.
“There is real pain overwhelming the real economy,” Biden said. “There is no time to wait. We have to act, and act now.”
The extent of the nation’s job losses “underscores the need for an extension of aid,” said Mark Hamrick, senior economic analyst at Bankrate.
“Many do need these funds to meet basic needs, to get caught up on bills, or to plug the gap on lost pay or hours worked while others will save the money. While inefficient to some degree, this has the ultimate benefit of boosting the broader economy and helping to lift employment or job security prospects for all,” Hamrick said.
Ultimately, bolstering the public health response “is key to stopping the mounting labor market damage,” Konkel said.
“Until people feel safe again, industries like hospitality and tourism cannot ramp back up. Right now, it’s a muted recovery at best. Controlling the virus is key to restoring the livelihoods of millions currently out of work,” Konkel said.
“There’s no time to start like today,” Biden told reporters Wednesday night inside the Oval Office. “We’re going to start by keeping the promises I made the American people.”
Biden is expected to sign executive orders Thursday that will ramp up Covid-19 vaccinations and expand testing.