Thursday is the day the Labor Department releases data from unemployment insurance weekly claims.
On this January 21st was no different: early in the morning, most media outlets were announcing the number fell slightly last week, to 900,000, still a historic high level.
Before the pandemic, the record was from 1982, with a total of 695,000 claims.
This is the 44th straight week the number is higher than in the worst week of the Great Recession (2007-08).
Altogether, about 16 million people claimed the benefit in the week ended on January 2nd, the most recent data available. It’s expected to rise since an extension of the unemployment insurance was approved by Congress in late December as part of the stimulus bill.
The numbers suggest how hard the economy is struggling to recover from the pandemic’s hit in March.
The fragile job market also signals the urgency for Congress to approve Joe Biden’s $1.9 trillion relief plan, despite the slim majority Democrats have in the House and the Senate.
It’s also getting more and more apparent that it will be difficult to stabilize the economy unless the coronavirus pandemic is under control.
Covid-19 has infected more than 24,5 million people in the U.S. and caused over 400,000 deaths.
“Unemployment claims continue to show a job market unable to progress further as long as COVID-19 remains in the driver’s seat,” Daniel Zhao, a senior economist, told the Associated Press. “While the vaccine offers a light at the end of the tunnel, we’re still far away from a complete reopening of the economy that could drive rehiring and stem further layoffs.”
The U.S. unemployment rate was 6.7% in December, unchanged from the previous month, after skyrocketing to 14.7% in April. Before the pandemic, the unemployment rate reached a 50-year low of 3.5% in February.
Some experts believe as the Covid-vaccine becomes widely available, economic growth will accelerate and create new jobs in the second half of the year.
In a recent Wall Street Journal survey, economists forecast the U.S. economy will grow 4.3% this year. It’s a sharp increase from the 3.7% growth forecast for 2021 in last month’s survey.
The projections point to a GDP contraction of 2.5% in 2020, but the official number will be released next week, on January 28, by the Commerce Department.
Others, like Goldman Sachs, are even more optimistic. In a recent note to clients, the bank raised its forecast for US GDP to 6.6% in 2021 from 6.4%. It also expects a lower US unemployment rate of 4.5% at the end of 2021, lower than the previous 4.8%.
This would be possible, though, only if Congress approves at least part of Biden’s rescue plan.
“We do not expect all of the elements of the $1.9 trillion proposal to pass, but we have raised our expectations for state fiscal aid, education and public health spending, unemployment insurance benefits, and several smaller items,” Goldman economists wrote.