US unemployment claims climbed to nearly a million last week in the latest sign that a resurgence in the coronavirus crisis is taking its toll on jobs.
The number of people seeking jobless benefits rose by 181,000 to 965,000, the highest level since late August, according to government figures.
It comes after closely-watched non-farm payrolls data on Friday revealed the number of jobs in the world’s biggest economy unexpectedly fell in December, for the first time in eight months.
Joe Biden takes over next week
Businesses are under pressure as consumers avoid travelling, shopping and eating out in the face of soaring infection numbers.
The US reported more than 4,300 COVID-19 deaths on Tuesday, a new record high.
Closures of restaurant, bars and other venues in populous regions in New York and California have taken their toll on jobs – though some states and cities are resisting shutdowns.
Unemployment claims numbers have soared since the start of the crisis.
Prior to the pandemic they typically totalled just over 200,000, but spiked to nearly 7 million in the spring – 10 times a previous record high.
The level of jobless claims eased back over the summer, but has been stuck at more than 700,000 since September.
April 2020: Record 6.6 million Americans seek jobless aid
A stalling labour market recovery adds to the challenges facing Joe Biden when he takes over from Donald Trump next week.
The figures came hours before Mr Biden was expected to set out plans for a $2trn stimulus package.
Chris Rupkey, chief economist at MUFG in New York, said: “The economy clearly needs additional support from Washington because right now rising jobless claims tells us the labour market recovery has stalled and the direction is full-tilt down.”