New claims for unemployment benefits remained high last week, the government reported on Thursday, the latest evidence that the pandemic-racked economy still has a lot of lost ground to make up heading into a new year.
A total of 922,000 workers filed initial claims for state benefits during the final week of 2020, the Labor Department said, while another 161,000 new claims were filed under a federal pandemic jobless program. Neither figure is seasonally adjusted. On a seasonally adjusted basis, new state claims totaled 787,000.
The labor market has improved since the coronavirus pandemic broke out and closed down the economy. But of the more than 22 million jobs that disappeared in the spring, 10 million remain lost.
With a recently enacted $900 billion relief package that includes an extension of federal unemployment benefits, most of the unemployed can at least look forward to more financial help.
Still, “this winter is going to be very difficult,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics. “We’re seeing overall economic momentum is slowing, and that feeds through to the labor market.”
“Employers are very cautious about rehiring at the same time they have had to increase layoffs,” Ms. Bostjancic said, “but the resurgence of the virus is really the main culprit here.”
A fuller picture of December employment will come Friday when the Labor Department releases its monthly jobs report, and most analysts are expecting minor payroll gains — or even the first net loss since April.
While the availability of vaccines will speed the economy’s return to normal, employers remain wary about hiring, job recruiters say.
Job postings and hiring typically fall off at the end of December, and the trend after the latest holiday season has been more pronounced than usual. “Right now, employers are still cautious related to their work force strategy,” said Amy Glaser, senior vice president at the staffing firm Adecco USA.
The rebound has been bumpy, and employers have responded in kind, retaining flexibility to increase or reduce their staffing through the use of temporary workers, Ms. Glaser said. That could mean more people are cycling through jobs.
Julia Pollak, a labor economist at the online job site ZipRecruiter, has seen the same caution.
“Employers are being apprehensive, and job seekers are not yet flocking back to the market in droves, either,” Ms. Pollak said. “The virus is still spreading, hospitalizations have hit a new record, and there is a pullback in demand for certain services. A lot of stay-at-home orders and restrictions are causing a further decline.”
Some industries have managed to thrive. A key measure of manufacturing, for instance, rose this week to its highest level since 2018. Construction spending and employment have grown along with a surge in home buying. Staffing agencies say they have seen hiring in the automotive business and financial services. The demand for warehouse and delivery workers also remains strong.
One of the biggest trends has been the increase in customer service workers and call center representatives operating from home, Ms. Glaser of Adecco said. Those jobs require greater digital literacy than in the past, she said, because individuals must be able to set up their computers and solve problems themselves.
“There is no tech person sitting down the hallway,” she said.
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Wall Street appeared set to rise on Thursday despite the previous day’s chaos in Washington, when a pro-Trump mob overran the Capitol building, as investors were encouraged about the possibility of increased federal spending by a unified Democratic Congress.
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S&P 500 futures are pointing to gains when trading starts on Wall Street later Thursday morning. European stock indexes were moderately higher, and most Asian indexes closed higher.
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Even while scenes of guns drawn in the halls of Congress were unfolding Wednesday afternoon, the S&P 500 was able to hold on to its gains, closing 0.6 percent higher. Over all, it was another example of stock markets appearing divorced from reality — see last year’s double-digit gains on Wall Street while a pandemic smothered global economies.
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The Senate and House voted early Thursday to certify Joseph R. Biden Jr. as winner of the 2020 presidential election.
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Democratic control of the U.S. Senate — made possible by the results of two runoff elections in Georgia this week — is expected make it easier for Mr. Biden to pass stimulus measures to bolster the economy. Investors are also banking on the rollout of coronavirus vaccines to eventually energize business activity that has been dormant during the pandemic.
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“The markets paid very little attention to the riotous behavior in Washington,” ING analysts wrote in a note. Instead, investors have sustained an interest in riskier assets, such as stocks, set off by the Democrats’ success in Georgia.
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Treasury bond yields continued to rise, lifted by expectations that additional fiscal spending in Washington will generate more bond issues, reaching as high as 1.06 percent on 10-year notes. The yield climbed above 1 percent this week for the first time since March.
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Economists at Goldman Sachs said they expected Democrats to pass $750 billion in fiscal stimulus in the first quarter of the year now that they have control of the Senate. The U.S. investment bank also raised its forecast for economic growth this year to 6.4 percent from 5.9 percent.
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Oil was holding on to an 11-month high, after Saudi Arabia announced on Tuesday it would cut oil production. The U.S. crude benchmark, West Texas Intermediate, up 0.6 percent for the day, hit $51.28 a barrel before slipping a bit, while Brent crude reached $54.90.
When Jamie Dimon, the chief executive of JPMorgan Chase, issued a statement condemning the violence in Washington on Wednesday, he urged “our elected leaders” to call for an end to it. He did not directly mention President Trump.
Nor did the Charles Scharf, the chief executive of Wells Fargo (“The behavior in Washington, D.C., today is unacceptable”) or the chief executives of Goldman Sachs, Bank of America or Citigroup. Business leaders and organizations often instead referred to “leaders” or called for “the peaceful transition of power” to President-elect Joseph R. Biden Jr.
Business leaders have rarely criticized Mr. Trump directly. When he announced, shortly before he was inaugurated, that Stephen K. Bannon would be his chief strategist in the White House, Democrats on the congressional committees that oversee the finance industry asked industry leaders to publicly oppose the appointment. The lawmakers called Mr. Bannon a “bigot beloved by white supremacists” and said the business leaders had “a moral obligation to speak out.”
None did.
After Mr. Trump took office, chief executives found themselves in the uncomfortable position of deciding whether to take part in so-called business advisory councils, common forums for business leaders to influence the policy of a new president, even as he was rolling out policies many saw as hateful. Several such councils disbanded after Mr. Trump declined in 2017 to condemn violence by white supremacists in Charlottesville, Va., and said there were “very fine people” and “blame” on “both sides.”
With the president’s increasing efforts to subvert the election, organizations have grown bolder. On Monday, for example, 170 business leaders signed their names to a statement, organized by the business advocacy organization Partnership for New York City, urging Congress to certify the result of the presidential election, though some prominent members were missing.
On Wednesday, as a mob stormed the Capitol, organizations not known for vocal statements seemed to no longer worry about the political ramifications of speaking up against Mr. Trump.
The research group High Frequency Economics suspended regular publication of its research notes for the first time since the Sept. 11, 2001, attacks and sent a note to its clients: “We at High Frequency Economics are disgusted by the role of the president of the United States in inciting this riot, and we are saddened that he cannot find the character to stand up in front of the mob he has created, quell the violence and send everyone home.”
And the Business Roundtable, a group of chief executives, including Mr. Dimon, from some of the nation’s largest companies, was direct as to the cause of the violence.
“The chaos unfolding in the nation’s capital is the result of unlawful efforts to overturn the legitimate results of a democratic election,” the group said. “The country deserves better. Business Roundtable calls on the president and all relevant officials to put an end to the chaos and to facilitate the peaceful transition of power.”
William P. Davis and
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President-elect Joseph R. Biden Jr. set aside plans to deliver a speech on the economy on Wednesday afternoon, instead calling for an end to violent protests in Washington and calling on President Trump to stop what he called an “insurrection.” Mr. Biden’s speech was expected to emphasize several of his economic priorities, including reiterating calls for another round of financial aid to help people, businesses and state and local governments weather ongoing economic pain from the virus. The president-elect is still expected to deliver economic remarks in the coming days, a transition spokesman said.
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Federal Reserve officials were warily eyeing a surge in coronavirus cases at their Dec. 15-16 meeting, but they hoped that vaccine breakthroughs might set the stage for a strong economic rebound in 2021. “With the pandemic worsening across the country, the expansion was expected to slow even further in coming months,” according to minutes from the gathering of the Federal Open Market Committee, released Wednesday. “Nevertheless, the positive vaccine news” was “viewed as favorable for the medium-term economic outlook.”
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The Labor Department on Wednesday released the final version of a rule that could classify millions of workers in industries like construction, cleaning and the gig economy as contractors rather than employees, another step under the Trump administration toward endorsing the business practices of companies like Uber and Lyft.
Several states say they are moving quickly to restore federal unemployment benefits that lapsed last month when President Trump delayed signing a second round of federal pandemic relief.
A handful, including New York, Texas, Maryland and California, say they have started sending out the weekly $300 supplement that was part of the legislation, while others like Ohio say they are awaiting more guidance from the U.S. Labor Department.
Michele Evermore, a senior policy analyst at the National Employment Law Project, said that “at least half of the states should have something up by next week.”
Congress approved 11 weeks of additional benefits, and the entire amount will ultimately be delivered to eligible workers even if payments are initially delayed.
“Any claims for the first week will be backdated,” said James Bernsen, deputy director of communications at the Texas Workforce Commission.
In addition to a $300-a-week supplement for those receiving unemployment benefits, the $900 billion emergency relief package renews two other jobless programs created last March as part of the CARES Act.
One, Pandemic Unemployment Assistance, covers freelancers, part-time hires, seasonal workers and others who do not normally qualify for state unemployment benefits. A second, Pandemic Emergency Unemployment Compensation, extends benefits for workers who have exhausted their state allotment.
This latest round also offers additional assistance for people who cobble together their income by combining a salaried job with freelance gigs. The new program, called Mixed Earner Unemployment Compensation, provides a $100 weekly payment to such workers in addition to their Pandemic Unemployment Assistance benefits.
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