Unemployment Claims Fell Last Week

The weekly tallies have remained for months well above the pre-pandemic peak of 695,000 and are higher than in any previous recession for records tracing back to 1967.

“The virus is in the driver’s seat—there’s no getting around it,” said Daniel Zhao, senior economist and data scientist at Glassdoor, a company-ratings and job-listings website. “Until we control the pandemic, we can’t hope for a full recovery economically.”

Weekly numbers can be volatile, particularly around holidays. The 4-week moving average was 868,000 last week, the highest level since September, and an increase of 16,250 from the previous week’s revised average.

The claims figures have generally trended higher since November, when they were below 800,000, to 926,000 during the week of Jan. 9. They point to a slowing economic recovery, as surging coronavirus case numbers, fresh safety restrictions and colder weather hamper the labor market’s recovery from the initial shock of the pandemic last spring. Employers cut 140,000 jobs nationwide in December, with gains in many industries more than offset by losses at restaurants, bars, hotels and other businesses related to leisure and tourism.

When the coronavirus outbreak triggered widespread shutdowns and business restrictions last spring, Samantha DiStefano, owner of Mama Fox bar and restaurant in Brooklyn, said she laid off her entire staff of about 20 employees. During the summer, when new cases in New York were low and outdoor dining more feasible, she returned to pre-pandemic staffing levels, she said. But the holidays brought colder temperatures and fewer customers. Now, she is back to just a handful of employees.

“Things started getting quiet, and then they fell off a cliff by the Thanksgiving holiday,” she said. “Everyone’s been getting their hours cut.”

Still, the distribution of the Covid-19 vaccine and falling case numbers across the country might mean a light at the end of the tunnel, Mr. Zhao said.

“There is a case for cautious optimism that the economy will start to recover more quickly in the spring, and then could even rebound faster once the vaccine is widely distributed,” he said.

At Ms. DiStefano’s restaurant, sales are just a quarter of what they were last winter, before the pandemic struck, she said. She is hopeful for the spring, when milder weather might lure more diners and she can hire more wait staff. But it will take much longer for New York’s hospitality businesses to recover, she said.

“Even if revenue goes back to normal, it’s going to be years before we can get the ship straight again,” Ms. DiStefano said.

Continuing claims, a proxy for the number of people collecting unemployment benefits through regular state programs, fell to a seasonally adjusted 4.8 million in the week ended Jan. 16, from 5.0 million in the previous week, according to the Labor Department. While that is down from a peak of 25.9 million in May, it is still nearly three times the pre-pandemic level. The decline likely reflects that some unemployed workers found jobs while others exhausted state benefits.

The number of ongoing claims for two pandemic-specific programs put in first place last year rose in early January.

One program provides benefits for the self-employed and others not normally eligible for jobless aid. Continuing claims in that program rose by 1.6 million to 7.3 million in the week ended Jan. 9, according to the Labor Department. Claims for the other program, which offers extended benefits for individuals who exhausted other programs, rose by 837,000 to 3.9 million during the same period. Data for pandemic programs aren’t adjusted for seasonality.

The relief law passed in December extended both of those programs into March. They were previously slated to expire near the end of last year. That law also increased the weekly payment amount of all programs by $300. Larger payments and extended programs may have encouraged more laid-off workers to seek benefits.

Write to Hannah Lang at [email protected]