The weekly report is President Trump’s last before President-elect Joe Biden is sworn in Jan. 20. Biden will inherit a labor market badly weakened by the coronavirus pandemic and an economic recovery that appears to have stalled: 140,000 people lost their jobs in December, the first decline in months, with the United States still down millions of jobs since February.
The dire numbers will serve as a backdrop for Biden as he formally unveils an ambitious $1.9 trillion stimulus package proposal on Thursday that includes an expansion of the child tax credit, a $2,000 stimulus payment and other assistance for the economy.
Democrats were already using the weak labor to argue about the need for more aid.
The increase in claims is not entirely unexpected.
John Leer, an economist at Morning Consult, said that the increase could be explained in part by two other factors: states working through backlogs that built up over the holidays, and more incentives and ability for workers who had not filed claims or whose claims had lapsed to file claims. As the aid package passed by Congress in December kicks in, workers are now eligible for a $300-a-week unemployment supplement on top of whatever payment they are receiving from the state.
“There are a lot of people who it isn’t worth their effort to go through filing claims for $100 a week, but all of a sudden at $400 a week, it becomes worth their while,” Leer said. “There are so many confounding factors that it’s dangerous to read too much into one week’s numbers.”
Morning Consult’s polling data on unemployment, he said, had showed last week to be better than the week before it.
Economists say that the economy’s struggles can be explained in part by the delay Congress allowed between the summer, when many fiscal aid programs expired, and December, when lawmakers finally agreed on a new package after months of stalemate.
The number of new jobless claims has come down since the earliest days of the pandemic but remains at an extremely high level week in and week out. These claims have been higher than the worst levels seen during the Great Recession for more than 40 weeks.
The total number of people in any of the unemployment programs at the end of the year was 18.4 million, although officials have cautioned that the number is inflated by accounting issues and duplicate claims.