Key Highlights
- Nearly 714,000 filed initial unemployment claims last week, according to Us Department of Labor
- Nearly 289,000 new claims tallied under federal Pandemic Unemployment Assistance program
- Just 245,000 jobs added in November, down from 610,000 in October
- 400,000 people dropped out of labor force from October to November
During Thanksgiving week, nearly 714,000 jobless workers filed initial unemployment claims, according to the Labor Department. This number is down from the two consecutive increases in each of the two weeks prior to the holiday.
Diane Swonk, chief economist with the accounting firm Grant Thornton, said that the 714,000 number accounted for by the Labor Department could have been artificially depressed by the long holiday weekend. “People don’t apply as much when there are holidays. There is a natural falloff that occurs, but we just don’t know how big it was.”
However, the REAL reason unemployment dipped from 6.9% in October to 6.7% in November is largely due to some 400,000 people simply dropping out of the labor force.
Also during Thanksgiving week, nearly 289,000 new claims were filed under the federal assistance program, Pandemic Unemployment Assistance. This program provides financial assistance for gig workers, independent contractors, freelancers, the self-employed and others not typically eligible for unemployment insurance. This federal program is one of two federal programs set to expire at the end of December 2020 and at the moment, there is no consensus federal assistance program passed nor scheduled to take over financial relief elements to those negatively impacted by the coronavirus.
Totaling the number of claims for assistance during Thanksgiving week under state unemployment benefits and the Pandemic Unemployment Assistance program comes to just over 1M.
Job listings at Glassdoor fell -2.5% between October and November, the first such decline since May. The listings drop was widespread among different parts of the country and among different economic sectors but the hardest hit continue to be retail, travel, travel/hotel, restaurants/bars, health care and education industries. Thus far, the US has recovered 56% of jobs lost in March and April and payroll employment remains -9.8M below pre-pandemic levels.
The prospect of COVID-19 vaccines is no doubt a powerful and positive long-term signal for the economy. Michael Gapen, chief US economist with Barclays, is looking for an economic growth rate near zero in Q1 and then a rebound later in the year as consumer spending begins to kick in.
Gapen said, “I think the economy is on a solid footing, but we may just hit a could of bumps between now and the end of the first quarter. Stimulus would be helpful, of course…” referring to a bipartisan stimulus package similar to the one Congress passed last March under the CARES Act. There may be a flicker of hope for Democrats and Republicans to come to an agreement about the size and breadth of such a program prior to benefits expiring on December 26.
Thanks to The New York Times and National Public Radio.
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