By Geoffrey Smith
Investing.com — The number of people filing initial claims for jobless benefits rose again to a new three-month high last week, indicating that the pace of layoffs due to the latest wave of the coronavirus pandemic is accelerating.
The Labor Department said 885,000 initial claims were filed last week, and revised the previous week’s number up by 12,000 to 865,000. Economists had counted on a decline to 800,000.
That’s the highest level since early September. The news comes a day after figures showing that retail sales fell 1.1% in November, their first monthly decline in six months. Together, the figures show a clear loss of momentum in the economy under pressure from a pandemic that has gained in strength with the onset of winter and with the increased transmission opportunities created by the election campaign and the holiday shopping season.
The number of people filing continuing jobless claims fell however, to 5.508 million from an upwardly revised 5.781 million. That was bigger than the expected drop, but economists warned against seeing it as a sign of improvement.
“The drop in continuing claims is not a sign of improving labor market conditions,” said Diane Swonk, chief economist with Grant Thornton, via Twitter. “Long-term unemployed are running out of benefits and shifting into special pandemic insurance, which is slated to expire unless Congress acts before year end.”
There was further evidence of the slowdown as the Philadelphia Federal Reserve’s monthly business survey showed a sharp drop in its main manufacturing index to 11.1 from 26.3, with declines in all of its sub-indices: prices paid, employment and new orders.
However, there was slightly better news from the housing market, which has been a source relative of strength all through the pandemic. The number of housing starts rose 1.2% on the month to 1.547 million, their highest since March. Building permits, meanwhile, rose 6.2% on the month to their highest in over 12 years.