The number of Americans filing first-time unemployment claims fell 3,000 from last week to 787,000, the Labor Department said Thursday.
Analysts expected 800,000 claims for the week ending Jan. 2. The previous week’s level was revised up by 3,000 from 787,000 to 790,000.
The states of Colorado, Kansas, and Texas saw the highest rises in claims, while California, Illinois, and Pennsylvania posted major declines.
Despite the slight fall in claims, the private sector has been struggling to keep individuals employed as it failed to bounce back from the effects of the coronavirus.
Private payrolls fell 123,000 in December, marking its first monthly decline since April when 22 million workers in the world’s largest economy lost jobs and just half managed to regain employment.
The government’s nonfarm payrolls report will be released Friday and it is expected to show an increase of 71,000 jobs in December, lower than the 245,000 added in November.
Against the weakness in the US labor market, the Senate refused to pass a relief bill that increases individual checks to Americans to $2,000 from $600 despite outgoing President Donald Trump supporting the move.
The Federal Reserve, on the other hand, is expected to continue its asset purchases “until substantial further progress” has been made in the economy, according to Federal Open Market Committee (FOMC) minutes released from the December meeting.
To achieve its goals of maximum employment and price stability, the central bank is expected to continue billions of dollars of purchases until the economy recovers from the coronavirus-led recession.
With COVID-19 vaccines starting to be distributed, investors are confident that the recession would soon come to an end, especially after Democrats regained control in Congress and the White House and are working on a larger stimulus package.
With strong confidence, major indexes in the US stocks opened higher Thursday heading to new highs.
The Dow Jones was up 139 points to 30,969 points shortly after the 9.30 a.m. EDT (1730 GMT) opening bell and the S&P 500 rose 31 to 3,779 points.
The Nasdaq increased 156 points to 12,896 points.
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