Initial claims for benefits slipped 19,000 to 787,000

New unemployment filings fell to 787,000 during a holiday week clouded with uncertainty around impending changes to benefit payments, the Labor Department said Thursday.

Early last week, Congress passed a $900 billion Covid-19 relief bill that will add a $300-a-week supplement for those receiving unemployment benefits and extend two pandemic-specific programs used by about 14 million people. But then President Trump said he was displeased with the bill, casting doubt on whether he would sign it into law. He ultimately did sign the measure on Sunday.

The level of claims has held above 800,000 in recent weeks, their highest level since the early fall and almost four times their pre-pandemic average. Still, they remain well below their peak of nearly seven million in late March, when a majority of states first issued stay-at-home orders to slow the spread of Covid-19.

The higher payments promised in the bill could have motivated some Americans to seek benefits last week, while the lack of clarity about whether the bill would become law may have persuaded other would-be applicants to wait. Unemployed workers aren’t required to file the week they are laid off, and not all applications are approved.

In addition to the uncertainty around the relief bill, weekly jobless claims figures can be volatile during holiday periods because of challenges with seasonal adjustment. A four-week moving average of initial jobless claims, which smooths out weekly variation, ticked higher in recent weeks, a sign of a loss of momentum in the labor market recovery. Read more at WSJ