The number of Americans filing for the first time for unemployment benefits has shrunk, which is a surprise last week despite the increase in Covid-19 infections that have led to more business restrictions and lack of fiscal stimulus that has a greater impact on the economy.
But in a separate report, consumer spending reportedly declined last month for the first time since April.
A report released by the Department of Labor today shows that the total unemployment claims last week recorded a total reading of 803,000 claims. This reading is less than the target set by analysts which is 885,000. Last week's reading also fell from the previous week's reading of 892,000.
Although unemployment claims fell from the highest reading of 6.867 million in March, the number recorded remained at a peak reading of 665,000 recorded during the financial crisis 2007-2009.
The recovery from the economic downturn due to the Covid-19 pandemic is deteriorating due to delays coming from Congress to to approve the stimulus package. Congress on Monday had just decided on an additional $ 900 billion stimulus package even though it was deemed a bit slow by economists.
The United States is hit by a new wave of Covid-19 cases, with more than 18 million people infected and nearly 320,000 dead, according to official Reuters data. The U.S. administration has re-imposed restrictions on several sectors of the economy as a measure to curb the spread of pandemics even though such actions have led to a reduction in consumer spending.
A second report from the Department of Commerce on Wednesday showed consumer spending, which accounted for more than two-thirds of U.S. economic activity, fell 0.4% in November.
