Jobless claims likely held at a high level last week as the U.S. economic recovery navigates a surge in new coronavirus cases and tighter restrictions on businesses in some states.
Economists expect unemployment claims ticked down to 733,000 last week from 742,000 a week earlier. Worker filings for unemployment insurance are down sharply from a peak of nearly seven million in late March. But they remain higher than in any previous recession—the pre-pandemic peak was 695,000 in 1982—for records tracing back to 1967.
Claims filings can be more volatile around the holidays, due to workweek changes that can cause seasonal-adjustment anomalies. The four-week moving average, which smooths out weekly variation, has continued to move downward, indicating the labor market continues to regain lost ground, but at a slower pace than over the summer.
A nationwide surge in Covid-19 cases threatens to weigh on the labor-market recovery, as many states and localities impose new restrictions on businesses, though less stringent than the ones introduced in the spring, economists say. Further, the spread of the virus, combined with the onset of winter, is likely to send more consumers indoors and hamper spending and employment in industries like restaurants.
“Covid is driving the bus on the economy, and we’re going to have some hairpin turns until we get to the nice, straight open road of the postvaccine world,” said Constance Hunter, chief economist at KPMG LLP.
