The number of Americans filing new claims for unemployment benefits fell sharply last week to a seven-month low. The Labor Department said Thursday it declined more than expected to 709,000 from 757,000 in the prior week.
While that’s down precipitously from its peak of nearly 7 million in March, it’s still well above the high hit during the Great Recession.
What’s more, the pace of decline in jobless benefit filings has slowed, and the raging COVID-19 pandemic and lack of additional fiscal stimulus could limit further improvement. New COVID-19 infections remained above 100,000 for an eighth straight day Wednesday, according to a Reuters tally. Layoffs could accelerate as new cases explode across the country.
The government’s $3 trillion in coronavirus relief, which helped the labor market improve over the summer, has run out. That could make it tougher for the economy to produce enough jobs for the millions of unemployed Americans.
The fragile labor market will be one of the major challenges facing President-elect Joe Biden when he takes the reins from President Donald Trump in January.