Unemployment claims rose less than expected last week as employers weighed a rise in winter time against expected $ 900 billion in relief from an upcoming stimulus package in Covid-19 cases, the Labor Department reported Wednesday.
In the week ending December 19, the number of first-time applicants for unemployment benefits fell to 803,000. The economists polled by Dow Jones expected an increase in initial applications to 888,000.
The first claims for the previous week were increased by 7,000 to 892,000, the highest pressure since the beginning of September.
Continued unemployment claims, an indicator of the number of people receiving benefits through regular government programs, fell in the week ended December 12 from 5.5 million the week before to a seasonally adjusted 5.3 million, according to the Labor Department.
A total of 20.4 million Americans were receiving unemployment benefits as of December 5, the report said.
“With a new bill, likely to be signed with additional benefits and an extension time, we will see how employees manage the job opportunities available in proportion to the size of those benefits,” wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group.
“For those unable to find work, the additional claims will obviously help. In any case, we hope that we will see a sharp drop in all of these numbers in the spring and summer,” he added.
The latest unemployment claims report came amid a dramatic showdown between President Donald Trump and U.S. lawmakers.
Earlier this week, with a veto-proof majority, Congress passed a long-awaited aid package worth US $ 900 billion. The bill includes $ 600 stimulus checks for most individuals and their loved ones, $ 300 per week federal unemployment benefits, and approximately $ 320 billion in corporate relief.
Democrats say the package is a step in the right direction, but they would campaign for more aid after President-elect Joe Biden took office on Jan. 20.
“While we hear naysayers criticizing the build and composition, the bottom line is that they will be investing $ 900 billion in households over the next few months, and that will absolutely support the economy,” said Nathan Sheets, chief economist at PGIM Fixed Income said in a note on Tuesday about the latest legislation.
But in a stunning tweet on Tuesday night, Trump doubted he would sign the bill that was the result of months of negotiations by his own Treasury Secretary, Steven Mnuchin.
Trump called the Covid Relief Act an inappropriate “disgrace” and urged Congress leaders to make significant changes to the measure, including making larger direct payments to individuals and families.
The U.S. has at least 215,400 new Covid-19 cases and at least 2,600 virus-related deaths daily, based on a seven-day average calculated by CNBC using data from Johns Hopkins University.
Data from the Atlantic’s COVID tracking project showed a record 117,000 people hospitalized with the virus.
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