The pandemic is taking unemployment claims a more enormous and more worrisome toll on the economy than anticipated according to experts.
Instead of adding a small number of employees, employers shed 140,000 workers from their payrolls in December, as most analysts expected, the government said Friday in its monthly employment survey.
"In Today's report shows the U.S. economy is flirting with disaster," said Josh Lipsky, an economics specialist at the Atlantic Council think tank. "The extraordinary relief measures taken to date have failed to keep pace with the virus, including the stimulus package passed last month."
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The Americans receiving unemployment claims insurance and filing for them is hovering near pre-pandemic highs. The number also exceeds any historical precedent by specific measures.
Nearly nine months after the health and the economic crises started, the amount represents intense and sustained staff suffering.
Erica Groshen, a labor economist at Cornell University and former commissioner of the federal Bureau of Labor Statistics, said, "The numbers we are looking at now are [far higher than] anything we've seen before." "We've never seen such a shock."
Labor Department said, about 5.9 million lodged a "continued claim" for state unemployment benefits the week of Nov. 14. For the number of individuals who earn insurance, continued claims are a rough proxy.
These figures are close to the previous record set in March 2009 during the Great Recession, with 6.5 million continued statements.
The current amount, though down significantly from its nearly 23 million claims pandemic peak in May, is still almost triple what it was in February.
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However, taking a more comprehensive view of unemployment claims services reveals that the proportion of people receiving unemployment benefits still well exceeds the previous record of the Great Recession.
Via the quick Pandemic Unemployment Assistance scheme, there are now about 9 million self-employed, gig, and other employees currently receiving compensation.
With their two Senate wins in Georgia this week, the recent passage of the $900 billion pandemic relief package for employees and companies and the possibility of additional federal spending after Democrats gained control of Congress have buoyed stocks as well as the expectations of Zmuda and several others seeking federal assistance.
Many analysts and other specialists, including those at the Federal Reserve, expect the economy to pick up steam about the middle of the year. Their theory is that the outbreak of coronavirus infection will have passed by then, and extensive vaccines will cause even more individuals to go out again.
Now, there is a little more uncertainty about those optimistic predictions. Combined with the rapid spread of virus infections and hospitalizations, and vaccine distribution concerns, Friday's disappointing report prompted some economists to warn that the grim conditions could extend into the spring and even beyond.
While in March and April of last year, the economy lost 22 million jobs and regained 12 million by November. Many of these workers are now at risk of losing employment again, and companies may postpone recalling new employees and recruiting them.
