Weekly claims for unemployment rose higher last week, but rose less than expected for an economy struggling to shake off the effects of a pandemic that has been in existence for almost a year now.
The Department of Labor reported Wednesday that the first time unemployment insurance was filed in the week ending Feb. 27 was a seasonally adjusted 745,000, which is less than the Dow Jones estimate of 750,000. The total was a slight increase compared to the 736,000 adjusted upwards the previous week.
Irregular severe winter storms in Texas took a toll on the labor market, leading to an increase of 17,769 documents for the state, according to unconfirmed data. Ohio and New York also saw significant increases in claims.
Continued claims declined again, dropping 124,000 to just under 4.3 million, another low point of the pandemic era, in data a week behind the main application number.
“We expected a significantly larger setback after the severe winter storm claimed, so this reading indicates that the underlying trend in layoffs is declining, thanks to the reopening that is currently underway in many states,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics, said.
‘As always, however, two good weeks in this volatile series prove nothing, but whatever happens next week, we expect the trend to drop sharply over the next few months, provided the new Covid variants do not cause a spring wave. in cases and, more importantly, hospitalizations. The jury is not yet available, ‘he added.
The report comes amid mostly positive signs for the US economy.
While economists expected slow growth to begin in 2021, followed by an acceleration in the middle of the year, estimates are rapidly revising upwards. The Atlanta Federal Reserve’s GDP tracker indicates growth in the first quarter of 10%.
Nevertheless, the correction of the labor market was the missing element in the broader picture. Although the unemployment rate from a pandemic peak tumbled from 14.8% last April to 6.3% in January, there are still large gaps in employment.
A report by ADP on Wednesday showed that private rents 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 grown by 210,000 , although the ADP number adds a bit of downside risk to the number.
There are about 10 million unemployed workers left until February, and the Department of Labor’s report on Thursday indicated that more than 18 million until February 13 still received some form of unemployment benefit.
However, the total dropped by just over a million, mainly due to a decrease in enrollments for special pandemic-related programs that benefit those who are not normally eligible, as well as those who use up their usual benefits. has.
A Stimulus Bill to which Congress wants to respond contains new grants for increased unemployment benefits.