US jobless claims rise to 861,000 as layoffs stay high

FILE - In this Dec. 10, 2020 file photo, a "Now Hiring" sign hangs on the front wall of a Harbor Freight Tools store in Manchester, N.H.   U.S. employers cut back sharply on hiring in December, particularly in pandemic-hit industries such as restaurants and hotels, as soaring virus infections and government restrictions weakened the economy that month. The number of available jobs rose slightly and layoffs fell, according to the Labor Departments Tuesday report, known as the Job Openings and Labor Turnover Survey, or JOLTS.  (AP Photo/Charles Krupa, File)
FILE - In this Dec. 10, 2020 file photo, a "Now Hiring" sign hangs on the front wall of a Harbor Freight Tools store in Manchester, N.H. U.S. employers cut back sharply on hiring in December, particularly in pandemic-hit industries such as restaurants and hotels, as soaring virus infections and government restrictions weakened the economy that month. The number of available jobs rose slightly and layoffs fell, according to the Labor Departments Tuesday report, known as the Job Openings and Labor Turnover Survey, or JOLTS. (AP Photo/Charles Krupa, File) (Copyright 2020 The Associated Press. All rights reserved.)

WASHINGTON – The number of Americans applying for unemployment aid rose last week to 861,000, evidence that layoffs remain painfully high despite a steady drop in the number of confirmed viral infections.

Applications from laid-off workers rose 13,000 from the previous week, which was revised sharply higher, the Labor Department said Thursday. Before the virus erupted in the United States last March, weekly applications for unemployment benefits had never topped 700,000, even during the Great Recession of 2008-2009.

The figures underscore that the job market has stalled, with employers having added a mere 49,000 jobs in January after cutting workers in December. Nearly 10 million jobs remain lost to the pandemic. Though the unemployment rate fell last month from 6.7%, to 6.3%, it did so in part because some people stopped looking for jobs. People who aren't actively seeking work aren't counted as unemployed.

Still, fraudulent claims for jobless aid in some states and other issues, including potential backlogs of claims, may be elevating the totals. Last week, for example, Ohio reported a huge increase in applications and said it had set aside about half that increase for further review out of concern about fraud. And this week, Ohio reported that applications under a federal program that covers self-employed and gig workers jumped from about 10,000 to over 230,000. That could reflect a backlog of applications, because Ohio hadn't reported data under that program until two weeks ago.

Likewise, Illinois reported this week that jobless claims under its regular state program doubled — from 34,000 to nearly 68,000.

“The unemployment claims data remain a mess,” said Stephen Stanley, chief economist at Amherst Pierpont.

Applications may rise in the coming weeks, economists said, because of ice storms that have caused business shutdowns across the country. Yet economists are generally optimistic that as the weather improves, COVID vaccines are more widely administered and further federal aid is distributed, the economy will pick up in the spring and summer.

The surge in claims may also reflect, in part, the extension of two federal jobless benefit programs under an aid package that Congress enacted late last year. The extension of those programs meant that some people who had used up all their unemployment aid were eligible to reapply. The federal aid package also provided a $300-a-week unemployment benefit on top of regular state benefits.