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Jobless Claims Unexpectedly Drop During Holiday Week as Stimulus Deal Gets Green Light

The number of workers seeking unemployment benefits unexpectedly fell during the holiday week as lawmakers approved a stimulus bill that renewed pandemic-related relief programs set to expire at the end of the year.

According to the Department of Labor, seasonally adjusted initial claims for the week ended Dec. 26 totaled 787,000 — a decrease of 19,000 from the previous week’s upwardly revised 806,000 new applications. Economists predicted filings to rise to 828,000 in the week ending Dec. 26. It marked the second consecutive week that jobless claims declined.

Still, unemployment remains historically elevated: The four-week moving average for first-time applicants increased by 17,750 to 836,750 — a sign that the American labor market remains under pressure amid the global health crisis. As the COVID-19 vaccine continues to roll out in the United States, officials in Colorado and California have identified cases of a more contagious variant of the coronavirus, which was first discovered in the United Kingdom.

Since mid-March, the U.S. has recorded more than 19.74 million infections, and at least 342,400 people have died. The outbreak has already forced some cities to impose new lockdowns and restrictions that have temporarily shuttered businesses such as restaurants, gyms and stores — and subsequently pushed more people out of work.

In an effort to help bolster the ailing economy, Congress early last week passed a $900 billion stimulus package that includes $600 in direct payments to individuals as well as an additional $300 a week for the unemployed. President Donald Trump, who initially rejected the bill in favor of $2,000 checks, ultimately signed it on Sunday. (Although the House of Representatives on Monday voted to pass legislation that would raise the individual payments from $600 to $2,000, Senate Majority Leader Mitch McConnell yesterday said that the proposal had “no realistic path to quickly pass the Senate.”)

The measure, which was paired with a $1.4 trillion bill to continue funding government agencies through September, also provides loans to small businesses, assistance for renters and appropriations for coronavirus vaccine distribution, plus other provisions. It did not include liability protections for businesses that were championed by Republicans or other Democrat-supported state and local funding.

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