Weekly unemployment claims rose less than expected last week, but remained above pre-pandemic levels as the U.S. economy tried to shake off the impact of Covid-19 and employers waited to see if President Joe Biden’s $ 1.1 billion stimulus would become law.
The Department of Labor reported Thursday that for the first time, the filing of unemployment insurance in the week ended March 6 amounted to a seasonally adjusted 712,000, below the Dow Jones estimate of 725,000.
Applications for state-owned enterprises for unemployed workers, seen as a proxy for redundancies, have declined in recent weeks but are still higher than pre-pandemic levels. The four-week moving average, which pushes out the fluctuations in weekly numbers, was 759,000.
The first Covid record for first-time applicants was 695,000.
Continued claims declined again, dropping by 193,000 to 4.1 million, another low point of the pandemic era, in data a week behind the main application number.
The latest Labor Department report comes amid mostly positive signs for the U.S. economy.
This is largely due to the rapid deployment of Covid-19 vaccines and expectations that most Americans over the age of 18 can be vaccinated before the peak summer months.
“This is once again the lowest pressure of the pandemic because workers are slowly being brought online again,” wrote Ian Lyngen, tariff strategist at BMO Capital Markets. “Only in the job market is a thorough reading that keeps the recovery trend going while vaccines are being administered, and still limited restrictions are being rolled back.”
Employers added 379,000 jobs in February amid strong jobs at restaurants and bars, according to the department’s latest monthly report released on Friday. Meanwhile, the government’s stimulus helped boost household income and spending in January, when the U.S. Treasury paid out millions of $ 600 million in payments.
That wind will be virtually guaranteed after President Joe Biden signed a $ 1.9 billion relief package into law that would send a round of $ 1,400 checks to Americans and cost billions to distribute vaccines.
The bill, which is expected to be signed Friday, is expected to catapult the pace of U.S. economic growth to multi-year highs later in 2021. In addition to direct payments, the bill includes a $ 300-a-week extension to federal unemployment benefits, a one-year extension of the child tax credit and $ 350 billion in relief for state, local and tribal governments.
The determination of the labor market was nevertheless a sluggish factor in the broader economic picture. Although the unemployment rate from a pandemic peak of 14.8% tumbled last April to 6.2% in February, there are still large gaps in employment.
There are about 10 million unemployed workers left around February, and the Labor Department’s report on Thursday indicated that by February 20, more than 20 million still received some form of unemployment benefits.