US weekly jobless claims rise to three-month high amid surging COVID-19 cases

WASHINGTON - The number of initial jobless claims in the United States rose for the second straight week to 885,000 last week, as surging COVID-19 cases weigh on economic recovery, the Labor Department reported on Thursday.

In the week ending Dec 12, the number of Americans filing for unemployment benefits increased by 23,000 from the previous week's upwardly revised level of 862,000, according to a report released by the department's Bureau of Labor Statistics (BLS).

It marked the highest number of jobless claims in three months, indicating the disruption of the labor market's recovery by recent COVID-19 spikes.

In the week ending Oct 17, the figure dipped below 800,000 for the first time since late March, and had been largely declining in the following weeks, but the trend was reversed in the weeks ending Nov 14 and Nov 21, and then in the week ending Dec 5.

"An unexpected rise in initial jobless claims is another sign that the labor market's recovery is backsliding," Sarah House, senior economist at Wells Fargo Securities, wrote in an analysis.

"Renewed restrictions and individual efforts to stem the spread of COVID are bearing down on the labor market," House said, noting that increase in jobless claims for a second straight week raises the risk of "a negative print for December payrolls".

The BLS report also showed that the number of people continuing to collect regular state unemployment benefits in the week ending Dec 5 declined by 273,000 to 5.5 million.

However, the recipients of Pandemic Unemployment Assistance, a federal program that applies to workers who usually do not qualify for regular state unemployment benefits, such as the self-employed and gig workers, soared by 688,793 to 9.2 million in the week ending Nov 28.

Meanwhile, the recipients of Pandemic Emergency Unemployment Compensation, which provides an additional 13 weeks of benefits for those who exhaust regular state benefits, increased by 268,532 to reach 4.8 million in the week ending Nov 28.

Both federal programs are set to expire, but Congress remains deadlocked over a new round of COVID-19 relief.

The total number of people claiming benefits in all programs -- state and federal combined -- for the week ending Nov 28 rose by 1.6 million to 20.6 million, signaling a stalled recovery in the labor market.