First claims for unemployment insurance last week amounted to 793 000, as declining Covid-19 cases offer little relief for the labor market.
The total for the week ended February 6 was higher than the 760,000 forecast of economists surveyed by Dow Jones, but a slight decrease compared to the previous upward revision of 812,000.
The era of the pandemic has provided a long struggle for the labor market to return to its previous level. Non-farm payrolls rose by just 49,000 in January, while the unemployment rate fell to 6.3%, mainly due to a decline in the workforce.
Continued claims for benefits, which are a week behind the weekly number, also decreased and decreased by 145,000 to 4.54 million, the lowest total since March 21, 2020.
However, the total number of those receiving benefits for the entire program increased to 20.44 million due to an increase in applications for two pandemic compensation programs: for those who would not otherwise receive benefits and for those whose usual benefits run out.
Entries for the special pandemic programs increased by nearly 2.7 million for the week ended January 23rd.
The programs expired on December 26, but were renewed by Congress for 2021. Issues with paperwork have led to delays for several states such as Ohio, which according to unconfirmed data rose by more than 90,000 claims last week. The new legislation offers benefits of $ 300 higher than what recipients would normally receive.
California also saw a significant increase with 23,588 new claims. Several states saw large declines, including Florida (-51,519), New York (-19,824) and Maryland (-19,736).
“Job growth will remain slow over the next few months as the country continues to struggle with the pandemic,” said Gus Faucher, chief economist at PNC Financial Services Group. “But the growth in employment will increase in the spring, as the distribution of vaccines and better weather people are more willing to face it, and the stimulating efforts have given consumers more money to spend.”
More than 10 million workers are unemployed despite more than 12.5 million jobs being recovered since the depths of the pandemic in March and April.
Federal Reserve Chairman Jerome Powell said on Wednesday that the position of jobs remains a long way from where it should be, saying the central bank is committed to keeping interest rates low until significantly more progress is made.