US: Worsening state of the pandemic is bearing down on the labor market – Wells Fargo

Data released on Thursday showed an unexpected increase in jobless claims, to the highest level in weeks. Initial claims jumped to 965K. While seasonal adjustment is hard this time of year, the recent wave of COVID is clearly weighing on jobs, explained analysts at Wells Fargo. 

Key Quotes: 

“The start of the year usually sees a surge in filings (unadjusted claims reached 1.15M) and the timing of holidays makes seasonal adjustment particularly hard this time of year, but that cannot fully explain away the rise.”

“Ten months into the pandemic, job instability remains tremendous. New filings relative to the number of jobs in the economy remains higher than at the peak of the Great Recession.”

“With the jobs recovery stalling, the extra $300 in weekly benefits provided by the COVID relief bill could not come soon enough for many families. Continuing claims for regular benefits are rising again, while recipients across all programs total more than 18M.”