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Painful 2020 ends for US workers and layoffs could rise again

Despite a drop in weekly jobless claims, the US economy is far from healed after a year in which tens of millions of people lost their jobs due to the coronavirus pandemic, many of whom remain out of work.

New filings for unemployment benefits last week dropped below 800,000 for the first time in a month, the Labor Department reported Thursday, but experts say that is more likely a statistical fluke related to the holidays and political maneuvers in Washington, rather than a sign the economy is finally on track for a sustained recovery.

As the United States continues to weather the world’s largest coronavirus outbreak even as vaccines are finally being deployed, analysts see more layoffs on the horizon, at least in the early weeks of 2021.

“While prospects for the economy later in 2021 are upbeat, the economy and labor market will have to navigate some difficult terrain between now and then,” Nancy Vanden Houten of Oxford Economics said.

New initial jobless claims slipped to 787,000 for the week ended December 26, a drop of 19,000 from the prior week, the Labor Department said.

Another 308,262 people filed new claims for Pandemic Unemployment Assistance (PUA), one of the programs available to jobless workers who would not normally be eligible for benefits.

That means the total new applications remain above one million long after the business closures ordered in March to halt the spread of Covid-19 turned the economy upside down.