New US jobless claims down by 75,000

[WASHINGTON] New applications for US jobless benefits fell to 712,000 last week, a better-than-expected decline of 75,000, the Labor Department reported Thursday.

Economists had been anticipating the number of new claims to hold steady after spiking in the week ended Nov 21 to an upwardly revised 787,000.

The four-week average for initial claims also dropped by 11,000, according to the weekly data.

The report showed that through the week ended Nov 14, 20.2 million people continued to receive some form of unemployment benefit - a decline of about 350,000 - including under special programmes passed during the pandemic that will soon expire.

The fate of those programmes remains uncertain as Congress has yet to break the impasse over a new federal relief plan that can be approved in the few weeks before President-elect Joe Biden takes office.

Democratic leaders in Congress have thrown their support behind a US$908 billion bipartisan proposal, but Republican Senate Majority Leader Mitch McConnell continues to press for a much more limited plan of about US$500 billion.

Amid continued signs the labour market recovery has stalled, the big drop in jobless claims may not provide much comfort since the data are for the week that include the Thanksgiving holiday, which could skew the figures.

"The plunge in initial claims does not refute the idea that the trend is rising; we expected a sharp fall because of the difficulty of adjusting for Thanksgiving," said Ian Shepherdson of Pantheon Macroeconomics.

He warned that "initial claims likely will rebound strongly next week, probably rising above the 800,000 mark for the first time in eight weeks."

AFP