U.S. Jobless Claims Jump to Three-Month High Amid New Shutdowns

Applications for U.S. unemployment benefits surged last week, topping estimates with the highest level since September, suggesting that widening business shutdowns to curb the pandemic are spurring fresh job losses.

Initial jobless claims in regular state programs rose by 137,000 to 853,000 in the week ended Dec. 5, Labor Department data showed Thursday. On an unadjusted basis, the figure increased by almost 229,000. The prior week included Thanksgiving, and data tend to be volatile around holidays.

Continuing claims, the number of Americans on ongoing unemployment benefits, jumped by 230,000 to 5.76 million in the week ended Nov. 28. It was the first increase since August.

The claims reading topped all but one estimate in a Bloomberg survey of economists that had called for 725,000 initial filings and 5.21 million continuing claims, on an adjusted basis.

The increase in new claims -- which remain at more than triple pre-pandemic levels -- implies that the labor market recovery will be held back in coming weeks by new restrictions on restaurants and other in-person businesses. Expected distribution of the first virus vaccines this month could help curb spread and ease restrictions, but it’ll likely take months for it to reach a meaningful number of Americans.

The release signals a shaky start for the labor market this month, which could be reflected in the Labor Department’s monthly jobs report for December. Hiring faltered in November with a 245,000 gain that was the weakest in seven months, and Bloomberg Economics forecasts total employment will decline.