Weekly unemployment claims rose less than expected last week but stayed above pre-pandemic levels as the U.S. economy tried to shake off the impact of Covid-19 and employers waited to see if the $ 1.9 trillion stimulus from President Joe Biden would become law.
The Labor Department reported on Thursday that initial claims for unemployment insurance in the week ending March 6 totaled 712,000 seasonally, below the Dow Jones estimate of 725,000.
Applications for unemployed state aid, seen as a proxy for layoffs, have slowed in recent weeks but remain well above pre-pandemic levels. The four-week moving average, which smooths out fluctuations in weekly numbers, was 759,000.
The pre-Covid record for new applicants was 695,000.
Persistent claims are down again, by 193,000 to 4.1 million, another low pandemic era, in data a week behind the number of headline claims.
The latest Labor Department report comes amid mostly positive signs for the US economy.
That’s largely due to the accelerated rollout of Covid-19 vaccines and the expectation that most Americans over 18 could be vaccinated before the summer months.
“This again represents the lowest imprint of the pandemic as workers are slowly being brought back online,” wrote Ian Lyngen, rates strategist at BMO Capital Markets. “On the net, a solid labor market reading that holds the recovery trend in place as vaccines are administered, and covid restrictions are still being rolled back.”
Employers added 379,000 jobs in February amid strong hires at restaurants and bars, according to the department’s latest monthly jobs report released Friday. Meanwhile, government incentives helped boost household income and spending in January, when the U.S. Treasury paid out millions of $ 600 payments.
That tailwind is almost guaranteed to increase after President Joe Biden signed a $ 1.9 trillion aid package into law that will send a round of $ 1,400 checks to Americans and set aside billions for vaccine distribution efforts.
The bill, expected to be signed Friday, is expected to catapult the pace of US economic growth to multi-year highs later in 2021. In addition to direct payments, the bill includes an extension of $ 300 per week in federal unemployment assistance, an extension of the tax credit for children for a year and $ 350 billion to relieve state, local and tribal governments.
Still, the recovery of the labor market is a slow factor in the broader economic picture. Although the unemployment rate has fallen from a pandemic high of 14.8% in April in April to 6.2% in February, there are still huge employment shortages.
There are still about 10 million unemployed workers through February, and Thursday’s Labor Department report indicated that more than 20 million continued to receive some form of unemployment benefit through February 20.