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Weekly jobless claims edged up last week, but increased less than expected for an economy struggling to shake off the impacts of a pandemic that has been around for nearly a year.
The Labor Department reported on Wednesday that the first UI filings during the week ended Feb. 27 stood at seasonally adjusted 745,000, slightly below the Dow Jones estimate of 750,000. The total was a slight increase from the 736,000 revised upwards of the previous week.
Unadjusted data shows unusually harsh winter storms in Texas wreaked havoc on the job market, leading to an increase of 17,769 state filings. Ohio and New York have also seen a dramatic increase in compensation claims.
Continuing claims fell again, falling from 124,000 to just under 4.3 million, another pandemic-era low, in data that runs a week behind the number of claims.
“We were expecting a significantly larger rebound from the massive winter storm that lowered claims, so this reading suggests that the underlying trend in layoffs is down, thanks to the reopening now underway in many. States, ”said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
As always, however, a good two weeks in this volatile series doesn’t prove anything, but whatever happens next week, we expect the trend to drop sharply over the next few months, provided the new variants of Covid does not trigger a spring wave. In cases and, above all, in hospitalizations. The jury is still out, “he added.
The report comes amid mostly positive signs for the US economy.
While economists expected slow growth at the start of 2021 followed by acceleration in the middle of the year, the estimates are quickly revised upwards. The Atlanta Federal Reserve’s GDPNow tracker shows 10% growth in the first quarter.
Yet repairing the job market was the missing item in the larger picture. Although the unemployment rate has risen from a pandemic-era high of 14.8% last April to 6.3% in January, there are still huge employment gaps.
A report released on Wednesday by ADP showed private hires only increased by 117,000 people in February, below the Dow Jones estimate of 225,000. The Labor Department is expected to report on Friday that non-farm workforces have increased by 210,000, although the ADP number adds downside risk to that number.
About 10 million people remain unemployed until February, and the Labor Ministry report said on Thursday that more than 18 million people continued to receive some form of unemployment compensation until February 13.
However, that total fell to just over a million, largely due to a decline in enrollments in special pandemic-related programs that provide benefits to those who are not normally eligible as well as to those who have exhausted their regular benefits.
A stimulus bill that Congress is about to act on contains new allowances for improved unemployment benefits.
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