900,000 more Americans file for unemployment benefits

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The number of new applications for unemployment insurance declined slightly last week to 900,000, according to data released Thursday by the Labor Department.

In the week ending Jan. 16, the number of weekly jobless claims fell by 26,000 from the previous week’s revised level of 926,000. The previous week’s figure was initially reported to be 965,000 claims.

States also received 423,734 applications for Pandemic Unemployment Assistance (PUA), a program created to expand jobless benefits to gig workers, contractors and others who don’t qualify for traditional unemployment insurance.

Weekly jobless claims data is vulnerable to inconsistencies due to backlogs and shoddy state unemployment processing systems. The persistence of high weekly claims, however, show the depth of the damage to the labor market caused by the coronavirus pandemic.

“The current wave of the pandemic doesn’t appear to be receding yet and the prospect of new, more transmissible variants raise the risk of a prolonged third wave,” wrote Daniel Zhao, senior economist at Glassdoor, in a Thursday analysis.

“While the vaccine offers a light at the end of the tunnel, we’re still far away from a complete reopening of the economy that could drive rehiring and stem further layoffs.”

The number of weekly claims has remained well above the 690,000 record set in 1982 since the end of March, and claims rose during the end of 2020 as the economy lost jobs on net in December.

There were more than 18 million Americans on some form of jobless aid during the week ending Dec. 26. That number declined to 15.9 million in the first week of 2021, but unemployment insurance experts say the drop is due to a lapse in jobless benefits that occurred because of the delay in renewing several programs.

“This is a data/administrative issue, not that 2.5 million people magically came off [unemployment insurance] due to exhausting or going back to work,” said Elizabeth Pancotti, policy adviser at progressive advocacy group Employ America, in a tweet.

PUA and several other expanded unemployment benefit programs created by the CARES Act in March 2020 briefly expired in December as former President Trump and Congress struggled to strike a deal on larger coronavirus aid bill. While Trump eventually signed that bill, which extended the programs through March 2021, state unemployment offices needed several weeks in advance to prevent recipients from briefly losing benefits.

President Biden has proposed a $1.9 trillion coronavirus response and economic aid plan that would extend CARES Act expanded unemployment benefits through September and increase the weekly $300 boost to unemployment checks to $400.

Updated at 9:32 a.m.

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