Weekly unemployment claims rose last week, but have risen less than expected for an economy struggling to shake off the impact of a pandemic that has been going on for almost a year now.
The Department of Labor reported Wednesday that the first unemployment insurance filings 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 increase from 736,000 revised upwards from the previous week.
Extremely severe winter storms in Texas have affected the labor market, resulting in an increase of 17,769 demands for the state, according to unadjusted data. Ohio and New York also saw significant increases in demand.
Ongoing demand fell again, falling from 124,000 to just under 4.3 million, another period from the pandemic era, in the data that is one week behind the number of main requests.
“We expected a substantially higher recovery after the huge winter storm that pushed demand down, so this reading suggests that the underlying trend of layoffs is declining due to the ongoing reopening in many states,” he said. said Ian Shepherdson, chief economist for Pantheon Macroeconomics.
“As always, however, two good weeks of this volatile series do not prove anything, but whatever happens next week, we expect the trend to drop sharply in the next few months, provided that the new Covid variants do not trigger a wave of spring in cases and, more importantly, in hospitalizations. The jury is still out, “he added.
The report comes on the back of mostly positive signs for the US economy.
While economists expected slow growth to begin in 2021, followed by an acceleration in mid-year, estimates are rapidly revising upwards. The Atlanta Federal Reserve’s GDPNow tracker shows a 10% increase in the first quarter.
However, fixing the job market was the missing element in the broader picture. Although the unemployment rate fell from a pandemic peak of 14.8% in April last year to 6.3% in January, there are still huge gaps in employment.
An ADP report found that private employment rose by just 117,000 in February, below the Dow Jones estimate of 225,000. The Department of Labor is expected to report on Friday that non-farm wages have risen by 210,000, although the ADP number adds a certain risk of disadvantage to this number.
About 10 million unemployed people remained until February, and the report of the Department of Labor indicated on Thursday that over 18 million continued to receive some form of unemployment compensation until February 13.
However, the total has dropped by just over one million, largely due to declining enrollment in special pandemic programs, which provide benefits to both those who are not normally eligible and those who have exhausted their benefits. common.
A stimulus bill that Congress is prepared to act contains new allowances for increased unemployment benefits.