Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations

Unemployment Claims Spike Amid Countrywide Coronavirus Surges


The wait for a vaccine is also the wait for an economic recovery. And as the pandemic intensifies, the picture on jobs is getting worse. New claims for unemployment benefits jumped sharply last week. This suggests more people are being laid off as businesses and customers react to that surge in coronavirus infections. Millions of people who are already receiving jobless help are in danger of losing those benefits in just a few weeks unless Congress acts to extend them. NPR's Scott Horsley is with us now.

Hi, Scott.

SCOTT HORSLEY, BYLINE: Good to be with you, Ari.

SHAPIRO: So last week saw the largest number of new unemployment claims since September. What does that tell us?

HORSLEY: It just confirms that, as more people are getting sick and dying from the coronavirus, businesses are cutting back. In some cases, they've been forced to do that because of new public health restrictions. In other cases, they're just responding to a drop in customer traffic. We know that when hospitals fill up, people get more cautious about going out shopping or going out to eat. And that means more pink slips for bartenders, waitresses, retail clerks.

Last week, more than 850,000 people applied for new state unemployment benefits. That's up nearly 20% from the previous week. Another 427,000 applied under a special federal program for gig workers and the self-employed. That number was up almost 50%. Now, there have been some reporting problems in these weekly claims, so you do want to take these numbers with a grain of salt. But when you see a really big jump like that, it's a pretty good indication something is pushing people out of work. And in this case, it's the pandemic.

SHAPIRO: So those are new unemployment claims, but many people have been out of a job for months already. What's the overall picture right now?

HORSLEY: You know, some industries have held up better than others. Construction and manufacturing, for example, have been less vulnerable to COVID shutdowns than a lot of other businesses. Delivery drivers and warehouse workers are in exceptionally high demand because of the surge in online shopping. But any business that depends on bringing people together, especially indoors, is just being hammered right now. The restaurants that were getting by in the summer and fall with the help of takeout and outdoor dining are again having to cut staff now.

Last month we saw the weakest overall job growth since the spring. And that slowdown, Ari, is really worrisome because we still have millions of people who are out of work. Obviously, we are hoping that job growth will pick up once these vaccines we've been talking about are approved. But even then, it's going to be months before they're widely available. And in the meantime, a lot of people are going to have trouble just keeping a roof over their heads and food on the table.

SHAPIRO: Meanwhile, we keep talking about congressional efforts to pass a new round of pandemic relief measures, which could include help for people who are out of work. How are those talks going?

HORSLEY: Slowly. And the clock is ticking because right now emergency unemployment benefits that Congress passed in the springtime are set to expire on the day after Christmas. A bipartisan package drafted by a group of moderate lawmakers would extend those benefits for another 16 weeks into April and also add an extra $300 a week. The administration has floated its own plan, which would extend the benefits but would not include the extra 300 bucks a week. And if no agreement's reached, then millions of jobless workers are going to be in danger of just losing their benefits altogether. Economist Mark Zandi, who's with Moody's Analytics, says that would be a disaster.

MARK ZANDI: It would be cataclysmic for the people who lose the benefit. I think it's DEFCON 1 for them. And the economy, which is already struggling, will probably backtrack. We'll start to lose jobs. We'll see unemployment start to rise. And recession risks will intensify.

HORSLEY: So there's a lot of pressure on these congressional negotiations. As of late November, there were more than 13 million people relying on emergency jobless aid that right now is set to run out on December 26.

SHAPIRO: That's NPR's Scott Horsley.

Thank you, Scott.

HORSLEY: You're welcome.

(SOUNDBITE OF THE SHINS SONG, "THE FEAR") Transcript provided by NPR, Copyright NPR.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.
KUER is listener-supported public radio. Support this work by making a donation today.