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Jobless claims spiked in the U.S. last week, with 853,000 people seeking new benefits

Labor Department data shows how surge in coronavirus cases is hitting the economy hard once again

President Trump finishes signing an executive order on vaccine distribution on Dec. 8. (Evan Vucci/AP)

The number of new unemployment claims rose sharply to 853,000 last week, an increase of 137,000 from the week before, another sign of the toll the pandemic is taking on the labor market.

The number of claims leaped over 800,000 for the first time since the week ended Oct. 10, when they came in at 842,000. It was the largest number since mid-September.

A spike in coronavirus cases in the United States has rattled large parts of the economy in recent weeks.

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There are now more than 1 million new cases of coronavirus each week in the United States, and the country shattered a record Wednesday with more than 3,000 deaths from the pandemic. Hospitals in many parts of the country are overwhelmed, and many state and local jurisdictions have imposed fresh restrictions to try to curb the increase.

Meanwhile, lawmakers have spent months in unsuccessful negotiations about another economic relief package, leaving the economy without the kind of support that economists say was so important to cushioning the pandemic’s blow early on in the crisis. A new round of talks recently started and has shown some progress, but a deal has remained elusive.

President Trump has pushed for a new round of $600 stimulus checks, but he has sought to extend only limited aid for unemployed Americans, while Democrats and some Republicans have sought more-robust benefits in anticipation of a crush of new filings. More than 10 million Americans remain unemployed, following the big spike in layoffs in March and April.

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The new burst of jobless claims from last week was slightly larger than the last two big jumps, for that October week, when they rose about 75,000, and in early August, when claims rose 133,000. That made it the largest increase in claims since millions began flooding the system at the pandemic’s outset in March.

“Given COVID-19 cases and deaths are now regularly setting new highs, these reports put into question job growth in December, especially given the rapid slowdown in growth in November,” Robert Frick, corporate economist at Navy Federal Credit Union, said in a statement.

An additional 427,600 claims were filed for Pandemic Unemployment Assistance, the program for gig and self-employed workers, according to data released Thursday by the Labor Department.

Economists have been warning for months about coming damage to the economy if Congress failed to authorize another stimulus package to help prop up struggling businesses and households. The labor market in general has fared better than the most dire projections made during the pandemic’s early months but has been flashing warning signs for weeks.

Most residents of California are under stay-at-home orders, with nonessential travel and hotel stays restricted, and closures affecting indoor dining, bars, nail salons, zoos and wineries. Officials in some parts of Maryland are prohibiting both indoor and outdoor dining. More measures in jurisdictions such as Virginia and New York are expected soon.

Claims in California increased week over week by 47,000 from the prior week, followed by increases of 31,400 in Illinois and 19,800 in Texas.

The 245,000 jobs added in November were the lowest number added since the recovery began in May and a sign December’s report could go into the negative. The number of unemployment claims is another concerning data point.

The number of people claiming benefits in all the programs was just over 19 million, although officials have warned that tally may be inflated due to data-processing issues compounded by the country’s patchwork unemployment system.