US jobless claims rise on Covid

Prashasti Awasthi Mumbai | Updated on January 15, 2021

A file photo of people waiting in line to attend a technology job fair, in Los Angeles, California in 2017.   -  Reuters

Number at nearly 1 million in the week ending January 9

The number of people in the US applying for unemployment benefits almost touched the one-million-mark last week as businesses still reel under the economic damage caused by the coronavirus pandemic.

According to an Aljazeera report, around 9,65,000 people have claimed to be jobless in the week ending January 9. This is the highest figure reported by the US Department of Labour in five months. The figure also registered an increase of 1,81,000 over the previous week.

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Consumer spending down

Oxford Economics lead US economist Nancy Vanden Houten wrote in a note to clients on Thursday, as cited in the Aljazeera report: “While prospects for the economy later in 2021 are upbeat, the labour market recovery has taken a step backward and we expect claims to remain elevated with the risk that they rise from last week’s levels.”

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This comes as consumer spending, which has a significant influence over two-thirds of the US economy, fell in November.

However, the US government passed a new Bill in December that includes a $300-weekly federal top-up to state unemployment benefits and provisions. This will allow laid-off workers to claim up to 24 weeks of federal unemployment benefits after they’ve exhausted state aid.

Meanwhile, US President-elect Joe Biden has unveiled an ambitious “American Rescue Plan,” that will infuse $1.9 trillion into the economy to help businesses revive from the shocks of Covid-19 lockdown, as per media reports.

Published on January 15, 2021

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