U.S. Unemployment Claims Rise As Economy Struggles

The number of state unemployment benefits claims rose by more than 738,000 last week, the Labor Department reported on Thursday. According to The New York Times, that number is nearly the same as it was last week. The United States' economy has struggled to cope with the effects of the coronavirus pandemic, which has left thousands out of a job.

Claims filed under the federal Pandemic Unemployment Assistance program -- which aims at providing financial help to freelancers, part-time workers, and others who are not usually eligible for benefits -- rose to 363,000 last week. In the week that ended on October 17, 21.5 million citizens were receiving benefits.

"More than a half year after the pandemic-caused downturn began, we remain in a very stressful time for the U.S. economy," said a senior economic analyst for Bankrate.com, Mark Hamrick.

While new state claims were much lower than at the beginning of the pandemic, adjusted for seasonality, the figures were still extremely high in a historical context. The Labor Department's latest comprehensive report on employment pointed to a slow increase in job creation as one of the factors.

A medical professional administers a coronavirus test at a drive-thru testing site
Getty Images | Drew Angerer

Other factors affecting the American economy include the fact that a new federal aid package has yet to be agreed upon by the Senate. According to CNBC, Mitch McConnell, the current Senate Majority leader, who won his reelection bid on Tuesday, said that passing a new stimulus package will be the Senate's highest priority when they reconvene next week. He also said aid at the local and state levels could be included in the new package. Democrats have continually asked for this type of aid to be included in relief packages.

However, with the election results dragging on for much of the week, it will still take some time for a stimulus package to be announced.

Financial experts are worried that the outcome of the 2020 presidential elections may impact economic growth and the labor market heading into 2021.

"The prospects of a fiscal stimulus over the next few weeks are still quite uncertain, and the possibility of even a stronger economy under a Democratic sweep is now highly unlikely," said chief U.S. economist for Oxford Economics, Gregory Daco.

Further lockdown restrictions may need to be imposed as the U.S. reached a daily new record of COVID-19 cases on Wednesday, according to The Inquisitr, which could put on more strain on the economy. According to the New York Times, many workers have already exhausted their state unemployment insurance.