Initial claims for unemployment benefits showed an unexpected jump higher to 770,000 as the labor market tried to recover from the Covid-19 pandemic that sent more than 22 million Americans to the unemployment line a year ago, the Labor Department reported Thursday.
Economists polled by Dow Jones were looking for a total of 700,000 for the week ended March 13. The total represents an increase from the previous week’s upward revised 725 000.
The report comes amid hopes that the U.S. job market is showing real signs of recovery from the coronavirus crisis, which has caused the big economy to shut down or activity to be curtailed, and which has been particularly difficult for those doing service-related jobs.
Texas, Florida and Mississippi are among the states that have either removed restrictions due to the pandemic. Pennsylvania will have to cut its business limits earlier in April, and other states are expected to follow suit amid warnings from some health officials about premature reopening.
Continued claims, which are a week behind the number of the title, have changed little at 4.12 million.
With cases of coronavirus falling or plateau and hospitalizations and deaths both sharply declining, several states have begun to reopen. In addition, the US vaccination rate is around 2.4 million a day, which offers further hope that the impact of the pandemic on national health and the economy will decrease.
A separate report on Thursday morning showed that production was still recovering sharply.
The production prospects of the Philadelphia Federal Reserve recorded a reading of 51.8, representing the percentage point difference between businesses that report growth versus those that have a decline. This was the highest reading for the index since April 1973.
This week’s unemployment claims number involves the week the Bureau of Labor Statistics uses to compile its non-farming payroll report, suggesting that March profits could be dampened.
The economy has added 545,000 jobs so far in 2021, and the unemployment rate has dropped to 6.2%.
Despite the rise in the labor market, the Federal Reserve on Wednesday indicated that it intends to continue its easy monetary policy into the future. The Fed has said it will keep short-term loans close to zero until the economy reaches full employment, which includes income, race and gender.
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