Weekly unemployment claims rose less than expected last week, but remained above pre-pandemic levels as the U.S. economy tried to eliminate the impacts of Covid-19 and employers they waited to see if President Joe Biden’s $ 1.9 trillion stimulus would become law.
The Department of Labor reported Thursday that the first unemployment insurance claims in the week ended March 6 totaled a seasonally adjusted 712,000, below the Dow Jones estimate of 725,000.
Applications for state aid for unemployment, seen as a substitute for layoffs, have slowed in recent weeks, but remain firmly above pre-pandemic levels. The four-week moving average, which smooths out weekly fluctuations, was 759,000.
The record prior to the award of first-time applicants was 695,000.
Continued claims declined again, falling from 193,000 to 4.1 million, another pandemic-era low, on data a week behind the number of major claims.
The latest Department of Labor report comes amid mostly positive signs for the U.S. economy.
This is due, in large part, to the accelerated deployment of Covid-19 vaccines and the expectations that most Americans over the age of 18 could be inoculated before the peak summer months.
“This again represents the lowest impression of the pandemic, as workers slowly reconnect,” wrote Ian Lyngen, rate strategist at BMO Capital Markets. “On the net, there is a solid reading about the job market that maintains the trend toward recovery as vaccines are administered and covetous restrictions continue to decline.”
Employers added 379,000 jobs in February amid strong hiring in restaurants and bars, according to the department’s latest monthly report released Friday. Meanwhile, government stimulus helped boost household incomes and spending in January, when the U.S. Treasury disbursed millions of $ 600 payments.
This tailwind is virtually guaranteed after President Joe Biden signs a $ 1.9 trillion relief package that will send a round of $ 1,400 checks to Americans and allocate billions to vaccine distribution .
The bill is expected to be signed on Friday and catapult the U.S. economic growth rate to multi-year highs later in 2021. In addition to direct payments, the bill includes an extension of federal unemployment assistance. of $ 300 per week. expansion of the one-year child tax credit and $ 350 billion in aid to state, local and tribal governments.
However, the fixation of the labor market has been a slow factor in the wider economic landscape. Although the unemployment rate has fallen from a peak in the pandemic era, from 14.8% last April to 6.2% in February, there are still huge gaps in employment .
About 10 million workers remain unemployed until February, and the Department of Labor report said Thursday that more than 20 million continued to receive some form of unemployment compensation through February 20.