The Fed warns that the recent rise in COVID cases could setback an economic recovery.

According to AP News, the head of the International Monetary Fund said Thursday that the while the United States and other major economies turned in better-than-expected economic performances in the third quarter, the world now faces slower momentum with a resurgence in coronavirus cases.

IMF Managing Director Kristalina Georgieva said in a note prepared for a virtual meeting of the leaders of the Group of 20 major economies that significant progress on the vaccines raised “hopes of vanquishing the virus that has taken more than a million lives and caused tens of millions of job losses” around the world.

The job market

Last week, applications for first-time unemployment benefits rose to 742,000, the first increase since early October. Some more concerning numbers about the labor market, per Morning Brew:

  • 20.3 million: U.S. workers receiving unemployment benefits at the end of October
  • 10 million: jobs the economy has lost since the pandemic started
  • 35: consecutive weeks that initial jobless claims have been worse than at the peak of the Great Recession

The context: New daily coronavirus infections have ballooned 80% the last two weeks, and states and cities are reimposing restrictions.

Looking ahead…Congress missed the sentiment behind Boxing Day. On Dec. 26, two CARES Act programs that offer additional federal unemployment benefits will expire:

  • One expands eligibility to contract workers and the self-employed for the first time.
  • The other provides an additional 13 weeks of federal benefits after state ones run out.

If these programs are allowed to expire, 12 million workers will go from receiving an average of $320 benefits/week to nothing, the Century Foundation estimates. Without that money, many could struggle to pay rent, buy food, and keep up with other necessities.