When another 965,000 Americans registered for unemployment, more than the 789,000 anticipated, the jobless rate figures overshot estimates in the week. As James Knightley of ING said, "it's a terrible result."
With the increasing mortality rate and coronavirus number of patients, this new unemployment figure is a strong reminder of how terrible things are even during the epidemic amid the sluggish rollout of vaccinations.
Chris Rupkey of MUFG says in a statement distributed on Thursday morning that the shock to the downtrend in the figures signals a possible risk point.
He said, "The economy is losing employment and elevation just two weeks into the new year." "In the first quarter of 2021, this leads to the risk of negative real GDP growth."
In addition to the almost one million initial charges, Rupkey noted that state statistics show rises in jobless claims, which "offers ample proof that the rebound of the labor force is halting."
With 10 million people currently out of jobs, Rupkey emphasized that "going into the new year, the economy confronts various problems like the growing path of new infections of coronavirus and country shutdowns forces businesses to lay off employees."
All this allows a better argument after the $908 billion passing at the end of December, Rupkey said, for further fiscal aid. "The economy needs more Washington assistance because increasing unemployment numbers right now tell us that the turnaround in the labor force has halted and the trajectory is fully tilted," he said.
Ian Shepherdson of Pantheon noted that he anticipated reports not to escalate but to proceed sideways before regulations loosen up on the service industry as "vaccination introduces herd immunity into view." According to Knightley's calculation, that would be several more months at the pace things are progressing.
That would, in the end, be the road out of this disaster. "Until the COVID-19 control mechanisms are eased and companies have the courage to employ, there will be no marked increase in the employment market," Knightley reported.
America's job crisis escalates as 965,000 Americans file unemployment claims