First-time unemployment benefit claims showed an unexpected jump of more than 770,000 as the labor market tries to recover from the Covid-19 pandemic that sent more than 22 million Americans to the unemployment line ago a year, the Department of Labor reported Thursday.
Economists surveyed by Dow Jones had been looking for a total of 700,000 for the week ended March 13th. The total represented an increase over the 725,000 revised upwards from the previous week.
The report was presented amid hopes that the US labor market will show real signs of recovery from the coronavirus crisis, which has halted or reduced activity in large economic fringes and has been especially heavy for those who they work in service-related jobs.
Texas, Florida and Mississippi are among the states that have drastically eliminated or reduced restrictions due to the pandemic. Pennsylvania will have to lower its trade limits in early April and other states are expected to do the same amid warnings from some health officials about premature reopening.
Ongoing claims, which remain one week behind the main number, varied little, with 4.12 million.
With the fall in coronavirus cases or high benefits, hospitalizations and deaths drop sharply, several states have begun to reopen. In addition, the U.S. vaccination rate has been around 2.4 million daily, providing more hope that the impact of the pandemic on national health and the economy will wane.
A separate report on Thursday morning showed that manufacturing continues to rebound sharply.
The Philadelphia Federal Reserve’s manufacturing outlook recorded a reading of 51.8, which represents the difference in percentage points between companies that recorded growth compared to those that experienced a decline. It was the highest reading of the index since April 1973.
This week’s number of unemployment claims comes in the week of surveys used by the Bureau of Labor Statistics to draw up its non-farm payroll report, suggesting that March earnings could be silenced.
The economy has added 545,000 jobs so far in 2021 and the unemployment rate has fallen to 6.2%.
Despite labor market gains, the Federal Reserve said Wednesday it plans to continue its easy monetary policy until the future. The Fed said it will keep short-term debt rates close to zero until the economy reaches full employment, which includes income, race and gender lines.
This is breaking news. Please check here again for updates.