Listen to this article

Last week, the number of Americans looking for unemployment benefits slightly fell to 793,000. It is evidence that job cuts remain high in spite of a substantial decline in new viral infections. On Thursday, The Labor Department said that total numbers declined Last week from 812,000 the previous week. That figure was revised higher from the previously reported figure of 779,000. The weekly applications for jobless aid had never topped 700,000 before the virus erupted in the United States in March, even during the Great Recession. The job market’s improvement slowed through the fall and in the last 2 months has essentially stalled. Employers have cut 178,000 jobs over the past two months and at least 10 million jobs remain lost to the pandemic.

However, the unemployment rate fell in January to 6.3% from 6.7% and it was mainly because many people who had lost jobs stopped looking for one. Point to be noted that the federal government doesn’t count people as unemployed unless they’re actively seeking work. More than 20.4 million people were receiving unemployment benefits in the week that ended on 23^rd Jan 2021. The job market’s persistent weakness is fueling President Joe Biden’s push for a $1.9 trillion economic rescue package. President Biden’s proposal would extend 2 federal unemployment benefit programs that are set to expire in mid-March. His proposal would also raise the federal unemployment benefit to $400 a week from the current $300.

On Wednesday, the US Federal Reserve Chair Jerome Powell highlighted the struggling job market and said he thought that any worrisome surge in inflation would be unlikely. He said the Fed has the financial tools it needs to quell inflation. For now, inflation remains below the Fed’s target rate. Powell said, “We are still very far from a strong labor market whose benefits are broadly shared”. A driving force behind the Biden administration’s push for more aid is the impending expiration of the extended jobless benefits in barely more than a month. At least 11 million people would lose benefits as a result. Powell said if these people were counted among the officially jobless, the unemployment rate would be nearly 10%. Job losses among the highest-earning one-quarter of Americans have been just 4%, while job losses among the poorest one-quarter have been a staggering 17%.