Initial claims for unemployment benefits showed an unexpected jump 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 interviewed 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 caused huge parts of the economy to shut down or activity to shrink and was particularly heavy for those working in 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, despite warnings from some health officials about premature reopening.
Ongoing claims without work, which is a week behind the headline, have changed little at 4.12 million.
As cases of coronavirus fall or plateau, and hospitalizations and deaths decline sharply, several states have begun to reopen. In addition, the US vaccination rate was around 2.4 million per 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, which differs the percentage point 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 unemployed claims number involves the survey week that the Bureau of Labor Statistics uses to compile its non-farming payroll report, suggesting that March profits could be dampened.
The economy added 545,000 jobs in 2021, and the unemployment rate fell to 6.2%.
At the state level, Texas last week saw an unadjusted increase of 21,003 documents, a month after the state was plagued by irregular severe winter storms that caused mass power outages and other damage.
Illinois also saw a significant increase with an increase of 17,147, while Ohio decreased by 14,7000.
Despite gains 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 has full employment, which includes income, race and gender.