The numbers: New applications for U.S. unemployment benefits leaped in early December to a nearly three-month, likely due to an increase in layoffs after a record coronavirus outbreak as well as the Thanksgiving holiday.
Initial jobless claims surged by 137,000 to 853,000 in the seven days ended Dec. 5, the Bureau of Labor Statistics said Thursday. Economists polled by MarketWatch had forecast new claims to total a seasonally adjusted 720,000.
Another 427,609 applications for benefits were filed through a temporary federal-relief program that expires at the end of the year, the government said Thursday.
While jobless claims have correctly reflected the rise and decline in unemployment during the pandemic, a government watchdog agency also found the number of distinct individuals applying for or collecting benefits has been inflated by fraud, double counting and other problems.
The Bureau of Labor Statistics plans to take steps to improve the data, but for now the claims report is not considered entirely accurate. Economists say to pay attention to the direction of claims instead of the totals.
What happened: New jobless claims rose the most in the states of California, Texas, Illinois and New York, where coronavirus cases have risen again. They fell in Lousiana.
The number of people receiving benefits through programs administered by the states, meanwhile, also rose. These so-called continuing jobless claims climbed by 230,000 to a seasonally adjusted 5.76 million in the week ended Nov. 28.
Continuing claims funded by a temporary federal program fell by an unadjusted 36,140 to 4.53 million in the week ended Nov. 17, the latest data available.
These claims have more than tripled since August, however, as people who’ve exhausted state benefits shift to the federal program, reflecting a growing number of Americans threatened with long-term unemployment.
The pandemic is not the only thing distorting the claims data. The weekly totals are also prone to large swings from Thanksgiving through New Year’s Day.
Many workers are hired for temporary jobs that end after the holiday season, for instance, and some people delay filing their applications immediately around holidays. The increase in new claims last week likely stemmed in part from more people filing application after Thanksgiving.
The total number of people receiving benefits from eight separate state and federal programs was reported at an unadjusted 19.04 million as of Nov. 21, but these numbers are under dispute.
The government’s more comprehensive monthly jobs report indicated that a far smaller 10.7 million people were unemployed in October.
Economists say the true number of unemployed is probably in the middle.
Big picture: The record increase in coronavirus cases has put more strain on the U.S. economic recovery, with many cities and states reimposing restrictions and some businesses being forced to sideline workers again.
Layoffs could remain elevated for months as businesses cut back and become more cautious about hiring again, at least until vaccines are broadly disseminated or the surge in coronavirus cases loses steam.