The number of Americans filing new claims for unemployment spiked sharply last week.
According to Reuters, first-time applicants for unemployment rose from 300,000 to 368,000 last week. This is higher than the estimated 20,000 new unemployment claims that were expected and it’s the biggest weekly increase since Nov. 2012. The increase in unemployment claims ended a three-week run of decreases that had the unemployment rate down to 7%. This doesn’t mean that the labor market in weakening, as both Oct. and Nov. saw a stable increase in nonfarm jobs.
Over 3.8 million collected unemployment benefits during the last week of November, but this number is likely to drop in the next few months. A federal program that allows the unemployed to extend the time they receive benefits 28 weeks past the six month mark it set to expire on Dec. 28. This could result in 1.28 million Americans losing unemployment benefits. That number may increase to around 2.1 million Americans by March, reports the Houston Chronicle.