Initial claims for unemployment benefits showed an unexpected rise to 770,000 as the labor market seeks 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 polled by Dow Jones were looking for a total of 700,000 for the week ending March 13. The total represented an increase from last week’s upward revised 725,000.
The report came amid hopes that the U.S. job market is showing real signs of recovery from the coronavirus crisis, which saw huge swaths of the economy shut down or curtailed activity, and which has been particularly stressful for those working in service-related jobs.
Texas, Florida and Mississippi are among the states that have lifted or greatly reduced restrictions as a result of the pandemic. Pennsylvania will cut its business limits in early April, and other states are expected to follow suit amid warnings from some health officials about premature reopenings.
Persistent claims, which are a week behind the headline number, had changed little at 4.12 million.
With the number of coronavirus cases falling or declining, and hospitalizations and deaths both on the decline, multiple states have begun to reopen. In addition, the vaccination rate in the US is about 2.4 million per day, adding further hope that the impact of the pandemic on public health and the economy is diminishing.
A separate report Thursday morning showed that production continues to recover strongly.
The Philadelphia Federal Reserve’s manufacturing outlook recorded a reading of 51.8, representing the percentage point difference between companies reporting growth and companies seeing a decline. It was the highest value for the index since April 1973.
This week’s number of jobless claims includes the survey week the Bureau of Labor Statistics uses to compile its nonfarm payroll report, suggesting March’s earnings could be moderate.
The economy has added 545,000 jobs so far in 2021 and the unemployment rate has fallen to 6.2%.
Despite gains in the labor market, the Federal Reserve announced on Wednesday that it intends to continue its lenient monetary policy well into the future. The Fed said it will keep short-term interest rates near zero until the economy reaches full employment, including income, race and gender limits.
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