Unemployment data shows worrisome trends
More than a million people filed for traditional unemployment benefits last week for the first time since July, further highlighting the impact the resurgence of the coronavirus pandemic is having on the U.S. economy.
By the numbers: Including those who filed for benefits under the Pandemic Unemployment Assistance program, more than 1.4 million Americans filed claims last week, an increase of more than 231,000 filing traditional claims and more than 123,000 filing for PUA support from the previous week, according to the unadjusted data.
- It was the second week in a row claims had increased for both programs, reversing an overall downtrend in jobless claims filings.
Why it matters: The numbers come on the heels of the government's December jobs report, which showed the U.S. lost 140,000 positions that month.
- “The rise and level of new unemployment claims is shocking,” Mark Hamrick, senior economic analyst at Bankrate, told Yahoo Finance Thursday.
- “This reminds us that the economic crisis has not gone away, far from it, at a time when multiple crises have been vying for our attention.”
Watch this space: The spike in traditional claims since the first week of December has come as PUA applications have decreased, suggesting the layoffs are not entirely pandemic related.
- Similarly, the loss of jobs at large companies shown by the ADP private payrolls report last month pointed to big companies looking to reduce headcount rather than small and midsized businesses being forced to shutter because of the virus.
The big picture: While the market is looking through the data to the second and third quarters when growth is expected to return, the weak data for December has even bullish analysts writing down their expectations for Q4 2020 and for the first quarter this year.