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Unemployment Claims Remain High as Millions Still Struggle to Find Work

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To many people, the economy will not noticeably improve for several months at least. Ms. Swonk expects hiring to have been unchanged or decline in December from November.

“The overall labor market is losing momentum at a critical juncture as cases soar,” she said.

On a seasonally adjusted basis, the number of new state claims was 787,000, a decrease from 806,000 in the previous week.

Stricter state and local restrictions on restaurants and other businesses will weigh heavily on the job market in the weeks ahead, said Scott Anderson, chief economist at Bank of the West in San Francisco.

Mr. Anderson expects that the monthly jobs report will show that the unemployment rate rose to 6.9 percent in December, from 6.7 percent in November. The unemployment rate has fallen sharply since peaking at 14.7 percent in April, but hiring has slowed as the economy has faltered in recent months.

The economy may have gained only about 20,000 jobs in December, said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. That would amount to a “huge deceleration from last month,” she added, when payrolls jumped by 245,000.

What’s more, the pace of layoffs has been persistently high, as industries like dining, travel and entertainment struggle because the pandemic is keeping many people at home even in states and cities that have not placed many restrictions on businesses. By contrast, many white-collar workers who have been able to work remotely have emerged from the economic turbulence relatively unscathed.

The introduction of vaccines is a bright spot, as are positive economic signs, like surging stock prices and a booming housing market. But it will be months before enough Americans can be inoculated to allow people to go to restaurants, events and movie theaters without fear of being infected.

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