WASHINGTON (AP) – The number of Americans seeking unemployment benefits rose last week to 770,000, a sign that layoffs remain high, even as much of the U.S. economy recovers steadily of the coronavirus recession.
Thursday’s report from the Department of Labor showed unemployment claims had risen by 725,000 the previous week. Figures have fallen sharply from the depths of last spring’s recession, but still show employers in some industries continue to lay off workers. Before the pandemic, applications for unemployment benefits had never exceeded 700,000 in a week.
The four-week average of claims, which softens weekly variations, dropped to 746,000, the lowest since late November.
A total of 4.1 million people continue to receive traditional state unemployment benefits, 18,000 less than the previous week. Including separate federal programs to help workers displaced by the health crisis, 18.2 million Americans received some form of unemployment assistance in the week of February 27, a reduction of 1.9 million from the previous week.
Continuous layoffs are occurring although the labor market as a whole has shown solid improvement. Last month, U.S. employers added 379,000 robust jobs, most since October, and a sign that the economy is strengthening as consumers spend more and states and cities are easing business restrictions.
With the acceleration of vaccinations, hopes are rising that Americans will travel, buy, eat out, and spend freely after a year of virus-induced restriction.
President Joe Biden’s $ 1.9 trillion relief package is also expected to help accelerate growth, especially with most adults receiving 1,400 stimulus checks this week. feed more spending. An extension of the $ 300 weekly unemployment benefits in early September will also provide support, along with money for vaccines and treatments, reopening of schools, state and local governments and affected industries ranging from airlines to wards. concerts.
“Labor market tensions continue, but we expect that applications (for unemployment benefits) will start to subside as restrictions are lifted and more normal operations are resumed,” said Rubeela Farooqi , chief US economist at High Frequency Economics, in a research note. “As companies return to full capacity, the employment and revenue prospects will improve and, combined with tax support, provide a strong boost to the economy.”
At the same time, the nation is still about 9.5 million below the number of jobs it had in February 2020. And Federal Reserve Chairman Jerome Powell suggested Wednesday after the last political meeting of the Fed that the overall economic outlook remained cloudy.
“The state of the economy in two to three years is highly uncertain,” Powell told a news conference after the Fed said it expects to keep its key interest rate at zero until 2023 despite some gains solid economic growth and concern about rising inflationary pressures. .
For most barometers, business activity in the vast and affected service sector of the economy is still far from normal. Data firm Womply said, for example, that early last week 63% of cinemas, galleries and other entertainment venues were closed. So were 39% of bars, 32% of gyms and other sports and recreation companies and 30% of restaurants.