The resurgence of the coronavirus is weighing heavily on the labor market, with more than 1.3 million people making new unemployment claims last week, an unexpected increase of 63,000 from the week before.

About 885,000 people applied for initial unemployment benefits at the state level, the Labor Department announced Thursday, the highest weekly total since September. Another 455,000 made initial claims for Pandemic Unemployment Assistance, the federal program that aids self-employed and gig workers – and that is scheduled to expire at the end of the month if Congress fails to renew it in the relief package currently under negotiation.

All told, more than 20 million people were receiving some kind of unemployment aid as of November 28, the Labor Department said.

Some comments on the report (with emphasis added):

• “The labor market is showing clear signs of deterioration. ... We expect the trend to persist amid a sharp rise in virus cases and subsequent business restrictions weighing on employment conditions.” – Eliza Winger, Bloomberg

• “U.S. weekly jobless claims continue to head in the wrong direction. The labor market outlook is bleak as the winter wave of the virus is going to lead to more shutdowns.″ – Edward Moya of the currency trading firm OANDA, via AP

• “[L]ast week was the 39th straight week total initial claims were greater than the worst week of the Great Recession. – Heidi Shierholz of the Economic Policy Institute

• “Bottom line: Unemployment claims are rising again, a key sign the economic recovery is in trouble. ... 14 million unemployed Americans will lose unemployment aid by January 1 unless Congress acts swiftly.” – Heather Long, Washington Post

In another sign that the economy is heading in the wrong direction, the Bureau of Economic Analysis announced Thursday that personal income fell in every state during the third quarter. “State personal income decreased 10.0 percent at an annual rate in the third quarter of 2020, after increasing 35.8 percent in the second quarter,” the agency said. “Personal income decreased in every state and the District of Columbia, ranging from –29.9 percent in West Virginia to –0.6 percent in Georgia.”

A huge reduction in Covid-related relief payments drove the decline, the BEA said, with transfer receipts for programs related to unemployment and health care falling by $1.3 trillion, following a $2.4 trillion increase in the quarter before.

“The data highlight the benefits of economic stimulus at a time when unemployment is high and a spike in U.S. coronavirus cases coupled with fresh restrictions keeping businesses closed are weighing on hiring,” Bloomberg’s Katia Dmitrieva wrote.

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