Weekly jobless claims rose less than expected last week, but remained above pre-pandemic levels as the U.S. economy tried to shake off the effects of Covid-19 and employers waited to see if President Joe Biden’s incentive was worth $ 1.9 trillion would become law.
The Department of Labor reported Thursday that initial jobless claims for the week ending March 6 were 712,000, seasonally adjusted, down from the Dow Jones estimate of 725,000.
Applications for state unemployment benefits, seen as proxy for layoffs, have slowed in recent weeks, but remain well above pre-pandemic levels. The four-week moving average, which compensates for fluctuations in the weekly numbers, was 759,000.
The pre-Covid record for first-time applicants was 695,000.
Enduring claims fell again, falling 193,000 to 4.1 million, another low in the pandemic era. The data is one week behind the total number of claims.
The latest Labor Department report contains mostly positive signs for the US economy.
This is largely thanks to the accelerated rollout of Covid-19 vaccines and the expectation that most Americans over the age of 18 could be vaccinated before the midsummer months.
“This is again the lowest pressure of the pandemic as workers slowly come back online,” wrote Ian Lyngen, rate strategist at BMO Capital Markets. “Solid reads on the web on the job market that sustains the recovery trend in vaccine administration and continues to reverse the covid restrictions.”
According to the department’s most recent monthly job report released on Friday, employers created 379,000 jobs in February as they were heavily hired in restaurants and bars. Meanwhile, government incentives helped boost household incomes and spending in January when the U.S. Treasury Department disbursed millions of $ 600 in payments.
That tailwind is guaranteed to intensify after President Joe Biden signs a $ 1.9 trillion aid package that sends a round of $ 1,400 checks to Americans and allocates billions to vaccine distribution.
The bill, expected to be signed on Friday, is expected to catapult US economic growth to multi-year highs later in 2021. In addition to direct payments, the bill includes an extension of federal unemployment benefits by $ 300 per week, extension of child tax credits by one year and $ 350 billion for state, local, and tribal governments.
The definition of the labor market, however, was a sluggish factor in the general picture of the economy. Although the unemployment rate fell from a pandemic high of 14.8% last April to 6.2% in February, there are still large job gaps.
There are about 10 million unemployed as of February, and Thursday’s Labor Department report shows that more than 20 million continued to receive some form of unemployment benefit through February 20.