Weekly unemployment demands rose last week, but rose less than expected for an economy struggling to eliminate the impacts of a pandemic that has existed for nearly a year.
The Department of Labor reported Wednesday that the first unemployment insurance claims in the week ending Feb. 27 totaled 745,000 seasonally adjusted, a touch below the Dow Jones estimate of 750,000. The total was a slight rise from 736,000 revised up from the previous week.
According to unadjusted data, Texas’s unstable winter storms affected the job market, leading to an increase of 17,769 applications in the state. Ohio and New York also experienced a considerable increase in claims.
Continued claims declined again, falling 124,000, to below 4.3 million, another low in the pandemic era, at a figure one week behind the number of major claims.
“We were expecting a substantially larger rebound after the huge winter storm pushed claims down, so this reading suggests that the underlying trend in layoffs is falling, thanks to the reopening that is taking place in many states. said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
“As always, though, two good weeks in this volatile series prove nothing, but no matter what happens next week, we expect the trend to drop sharply over the next few months, as long as the new Covid variants don’t trigger a wave of spring in cases and, most importantly, hospitalizations. The jury is still out, “he added.
The report appears amid mostly positive signs for the US economy.
While economists expected slow growth from 2021 followed by a mid-year acceleration, estimates are rapidly revising upwards. The Atlanta Federal Reserve’s GDPNow tracker points to 10% growth in the first quarter.
However, the fixation of the labor market has been the missing element in the wider picture. Although the unemployment rate has fallen from the peak of the pandemic era, from 14.8% last April to 6.3% in January, there are still huge gaps in employment .
An ADP report on Wednesday showed private hiring rose just 117,000 in February, below the Dow Jones estimate of 225,000. The Labor Department is expected to report on Friday that non-farm payrolls grew by 210,000, although the number of ADPs adds some downside risk to that number.
Approximately 10 million workers remain unemployed until February and the Labor Department report indicated on Thursday that more than 18 million continued to receive some form of unemployment compensation until 13 February.
However, that total fell by just over a million, largely due to a decline in those enrolled in special pandemic-related programs that provide benefits to those who are not usually eligible, as well as those who they have exhausted their usual benefits.
A stimulus bill that Congress is willing to pass contains new allocations to increase unemployment benefits.