First-time Unemployment Claims Back on the Rise as Virus Surges

In the last few weeks, as the coronavirus continued to surge rapidly across the country, states began strengthening restrictions on businesses – especially restaurants and bars – in an effort to flatten the curve.

It appears from statistics provided by the U.S. Department of Labor that those renewed restrictions are starting to have an effect on the unemployment rate.

In the week ending Dec. 5, the DOL reported, first-time claims for unemployment rose to 853,000, a hike of some 137,000 from the week before.

It’s the highest number of initial claims since September, although it obviously doesn’t touch the peak of claims, which hit nearly seven million in March, the early days of the pandemic. Total first-time claims had hovered around the mid-700,000 mark since October.

The news comes a week after the labor department released a November jobs report that said 245,000 jobs were added to the economy, but that figure was some 220,000 fewer than economists had predicted.

Nearly every state in the country (45, plus the Virgin Islands and Puerto Rico) saw a rise in first-time claims, although some were very negligible rises.

Some of the numbers:

  • California had 177,837 initial claims, up 47,454.
  • Illinois jumped into the “100,000 claim club,” with 105,599. That’s a rise of 31,468.
  • New York had 63,391 first-time claims, up 17,528.
  • Texas workers filed 44,663 first-time claims, an increase of 19,871.
  • Pennsylvania had 40,244 claims, up 16,366.
  • Louisiana had the country’s biggest decline, with first-time claims falling by 4,941.
  • Alabama saw a drop, albeit by only 2 claims.
  • Virginia had the country’s largest rise (outside the top 5) by going up 14,615.

Nela Richardson, chief economist at human-resources software firm Automatic Data Processing, Inc., told the Wall Street Journal the country could see a return to monthly net job losses as the surging pandemic “causes states to take steps to roll back the reopening process.”

“We’re seeing a cooling trend in the labor market, with rising layoffs,” Richardson told The Journal.

Factors that could affect such numbers include the rollout of a vaccine and increased COVID-19 stimulus from the federal government. Negotiations on such a package have been rocky.