Last Week, 793,000 Americans Filed For Unemployment Benefits—There’s Hope That Biden’s $1.9 Trillion Stimulus Plan And Vaccine Rollout Could Be Game Changers

It’s another disappointing and frustrating weekly jobless claims report. According to the United States Department of Labor, in the week ending February 6, first-time claims for unemployment insurance totaled 793,000. Adding to the sour tone of the report, the previous week’s data was revised upward by 33,000 from 779,000 to 812,000. Continuing claims, which relate to people who are still accepting benefits, are at 4.54 million.

These numbers reflect the tough time the economy is having trying to get people back to work. The total number of Americans receiving unemployment benefits increased to 20.44 million, due in part to a rise in filings for pandemic unemployment assistance programs. There are at least over 10 million unemployed workers in the U.S.

Reuters reports, “Claims remain above their 665,000 peak during the 2007 to 2009 Great Recession. They are, however, well below the record 6.867 million reported last March when the pandemic hit the [U.S.]”

We are still dealing with the pernicious issue of long-term unemployment. Roughly 3.6 million Americans exhausted their regular state benefits and continue to rely upon extended benefits.  According to the Wall Street Journal, citing a Pew Research Center survey, “About half of people who are currently unemployed are pessimistic about quickly finding a job.”

Despite the stubbornly high numbers of people losing their jobs, economists and Wall Street professionals contend that the bleak situation will soon brighten. They are pinning their hopes on President Joe Biden’s $1.9 trillion financial stimulus program, the rollout of vaccines and programs, such as the Paycheck Protection Plan that provides money to small businesses to retain workers.

Ian Shepherdson, Pantheon Macroeconomics chief economist, said, “The U.S. is in a much better position than we expected so early in the year and, as a result, pressure on governors to reopen is going to build more quickly.”

Reports indicate a decline in Covid-19 cases. As a result, large states that had aggressive lockdowns in place, such as California, New York and New Jersey, have slowly started lifting them. For instance, California lifted its stay-at-home order in late January. The state permitted restaurants to resume outdoor dining. New York City allowed restaurants to commence indoor dining with the provision of limited capacity. New Jersey Governor Phil Murphy allowed the reopening of restaurants, gyms and nail salons, as long as they adhere to limits on capacity.

The hardest-hit sectors during the outbreak were the industries that rely upon face-to-face interactions and large crowds of people. As restrictions ease and Americans are vaccinated, it’s logical to presume that these areas will reopen As people start feeling confident to frequent stores, shops, gyms, bars, hair salons and other retailers, there will be a big need for them to aggressively start hiring.