Unemployment claims remain four times the pre-pandemic average at nearly 800,000 as extra $300 per week benefit from COVID aid bill kicks in

The number of Americans seeking unemployment remained at nearly 800,000 claims heading into 2021 as the much-needed $300 per week benefit boost from the latest coronavirus relief bill kicked in. 

For the week ending on December 26, benefit claims were adjusted up by 3,000, bringing the total to 790,000. 

On Thursday, officials reported that number falling slightly to 787,000 for the week ending January 2.

Thursday's figure from the Labor Department, a slight decline from the previous week, showed that many employers are still cutting jobs as the pandemic tightens business restrictions and leads anxious consumers to stay home.

At the same time, the number of people who are receiving regular state unemployment aid fell 125,000 to 5.1 million. And fewer people were on extended unemployment benefit programs. 

For the week ending on December 26, benefit claims were adjusted up by 3,000, bringing the total to 790,000. On Thursday, officials reported that number falling slightly to 787,000 for the week ending January 2 (depicted above)

Thursday's figure from the Labor Department, showed that many employers are still cutting jobs as the pandemic tightens business restrictions and leads anxious consumers to stay home. People are seen waiting for food distribution in California

On Friday, the government will likely issue a gloomy jobs report for December. Economists expect it to show that hiring slowed for a sixth straight month - and possibly that employers shed positions for the first time since the job market collapsed in April just after the pandemic erupted.

Unemployment claims have remained close to 800,000, which is four times the pre-pandemic average.  

Unemployed Americans gained some urgently needed help late last month when a $900billion rescue aid package was finally signed into law. 

That measure provided a $300-a-week federal jobless benefit on top of an average state benefit of about $320. 

As many as half the states are now distributing the federal benefit, according to an unofficial tally at UnemploymentPUA.com. 

In states that take longer to pay out the $300 payments, any missed payments can be made retroactively. The federal extension of benefits was lengthened to 24 weeks by the congressional legislation. 

That program will remain in place until mid-March. A separate program that provides jobless aid to contractors and gig workers who previously weren't eligible was also extended for 11 weeks. 

Both benefits had briefly expired December 26, temporarily cutting off all aid for 10 million jobless Americans.

Unemployed Americans gained some urgently needed help late last month when a $900billion rescue aid package was signed into law. That measure provided a $300-a-week federal jobless benefit on top of an average state benefit of about $320

The Labor Department said this week that despite President Donald Trump's delay in signing the relief package - he did so six days after Congress' approval - jobless benefits under the extended programs that lapsed December 26 should be paid out without interruption.

The continued weakening of the US job market coincides with other signs that hiring and economic growth are faltering under the weight of the pandemic. 

On Wednesday, payroll processor ADP reported that private employers shed 123,000 jobs in December, the first such monthly decline since April. 

ADP's figures generally track the government´s jobs data over time, though they can diverge significantly from month to month.

In November, consumer spending - the lifeblood of the economy - declined for the first time in seven months, having steadily weakened since summer.

Retailers have been especially hurt. Purchases at retail stores have dropped for two straight months.

During the holiday shopping season, consumers pulled back on spending, according to debit and credit card data tracked by JPMorgan Chase based on 30 million consumer accounts. 

Such spending was 6 per cent lower in December compared with a year ago. That was worse than in October, when card spending was down just 2 per cent from the previous year.