The number of Americans filing first-time claims for jobless benefits increased further last week, suggesting that an explosion in new COVID-19 infections and business restrictions were boosting layoffs and undermining the labor market recovery.
Still, the economy got off to a solid start in the fourth quarter, with consumer spending and business investment in equipment topping analysts’ expectations in October. Businesses also reported a sharp rebound in profits in the third quarter.
That was, however, insufficient to lift the heavy cloud over the economy. Personal income dropped last month and could decline further with about 13.6 million Americans due to lose government-funded unemployment benefits a day after Christmas.