US unemployment remains sky-high as cuts to benefits loom

US unemployment numbers remain perilously high following the inauguration of President Biden, who has promised to “shut down” Covid-19 without shutting down the economy even as jobless benefits for millions are poised to expire.

Unemployment totals have dropped slightly, to 793,000, the Labor Department reported on Thursday, acknowledging that the drop from last week’s total of 812,000 doesn’t necessarily represent an improvement in the country’s economic situation.

Instead, the unemployment rate’s decline to 6.3 percent from 6.7 percent represents the fact that many who lost their jobs earlier in the pandemic have given up looking for work. Federal Reserve chairman Jerome Powell acknowledged that if those who’d given up the job search were counted, the unemployment rate would be closer to 10 percent. Indeed, over 2.5 million more people received unemployment benefits for the week ending January 23 than had the week before – 20.4 million as opposed to 17.8 million.

The situation is poised to deteriorate further next month, when two pandemic unemployment programs are due to expire. The Biden administration is hoping to push through a $1.9 trillion aid package that would extend those benefits through August, as well as hike federal unemployment benefits to $400 per week. If the government does not extend federal jobless benefits, 11 million people will be kicked off the jobless rolls, according to the Century Foundation think tank.

In addition to worrying about unemployment benefits, many Americans are also facing the loss of their homes owing to being unable to pay rent or mortgage bills. While Biden extended last year’s eviction moratorium through March, a long-term fix has not been devised, and millions owe several months of back rent they have no hope of being able to afford.

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