According to Bloomberg News, United States state unemployment surged suddenly for the second straight week, the highest ever in two months. This move is suggesting that the recent upsurge in the number of Covid cases might be the reason for the dismissals.
In the week that ended January 8th, the claims related to initial unemployment amounted to $230,000, recording a surge of 23,000 from the earlier period, as per data released by Labor Department Thursday. In a Bloomberg Survey, the economists called for a median estimate of 200,000 applications.
In the week that ended January 1st, the continuing claims related to state benefits declined to 1.6 million. The surge in claims related to unemployment implies that business entities are reducing costs by laying off workers since there is a huge surge in the number of coronavirus cases of late. Having said that, the upsurge might be temporary as the latest surge ebbs a little as employers strive to keep their staff onboard amidst an already existing shortfall of labor.
According to Bloomberg economist, Eliza Winger, the surge in the number of coronavirus infections is causing a temporary closure of the businesses and it is quite likely that such a scenario might have caused some of the workers to opt for jobless benefits. However, most of the businesses are operating but with a limited number of workers.
The sudden upswing might indicate current difficulties adjusting for the seasonal impact on the holidays, which has made it difficult to ascertain the claim figures in recent weeks.
If considered on an unadjusted basis, the claims increased to 419,446 in the previous week, the highest ever since May. Texas, New York, and California State were found to have the greatest of unadjusted claims reports Bloomberg News.
