WASHINGTON (AP) – The number of Americans claiming unemployment benefits rose to 770,000 last week, a sign that layoffs remain high even as much of the US economy is constantly recovering from the coronavirus recession.
Thursday’s report from the Department of Labor showed that unemployment claims had risen from 725,000 a week earlier. Figures have fallen sharply since the depths of the recession last spring, but show that employers in some industries continue to lay off workers. Prior to the pandemic, unemployment benefits had never exceeded 700,000 in a single week.
The four-week average of receivables, which smooths out weekly variations, fell to 746,000, the lowest since the end of November.
A total of 4.1 million people continue to collect traditional state unemployment benefits, down 18,000 from the previous week. Including separate federal programs designed to help workers displaced by the health crisis, 18.2 million Americans received some form of unemployment assistance in the week of February 27, down 1.9 million from the previous week.
Continued redundancies are taking place even though the overall job market has shown solid improvement. Last month, US employers added 379,000 robust jobs, the highest since October and a sign that the economy is consolidating as consumers spend more and states and cities are easing business restrictions.
With the acceleration of vaccinations, hopes are rising that Americans will travel more and more, shop, eat out and spend freely after a year of virus-induced constraint.
President Joe Biden’s $ 1.9 trillion aid package is also expected to help accelerate growth, especially in most adults this week receiving 1,400 incentive checks that should fuel more spending. . An extension of $ 300 a week in unemployment benefits until early September will also provide support, along with vaccine and treatment money, the reopening of schools, state and local governments and troubled industries, from airlines to theaters. concert.
“Tensions in the labor market are ongoing, but we expect demand (for unemployment benefits) to begin to fall as restrictions are lifted and more normal operations resume,” said Rubeela Farooqi, chief US economist at High Frequency Economics. , in a research note. “As businesses return to full capacity, the job and revenue outlook 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 fewer than the number of jobs it had in February 2020. Federal Reserve Chairman Jerome Powell also suggested on Wednesday, after the Fed’s last political meeting, that the outlook general economic conditions remained turbulent.
“The state of the economy in two or three years is extremely uncertain,” Powell told a news conference after the Fed signaled that it expects to keep the key interest rate close to zero by 2023, despite solid economic gains and concerns about rising inflationary pressures. .
According to most barometers, business activity in the extended and severely affected service sector of the economy is still far from normal. The data company Womply said, for example, that at the beginning of last week 63% of cinemas, galleries and other entertainment venues were closed. So were 39% of bars, 32% of gyms and other sports and leisure activities and 30% of restaurants.