© Reuters. FILE PHOTO: People lined up outside the Kentucky Career Center in Frankfort
By Lucia Mutikani
WASHINGTON (Reuters) – The number of Americans filing new unemployment claims unexpectedly rose last week, but this increase could reduce labor market conditions that are rapidly improving as more parts of The economy reopened and fiscal stimulus began.
The second consecutive increase in weekly claims reported by the Labor Department on Thursday in contrast to reports this month showed that the economy created 916,000 jobs in March, the most in seven month and job open rates rose to a two-year high in February. Households are also optimistic in assessing the labor market.
Conrad DeQuadros, senior economist said: “We believe moves to continue to reopen the economy will lead to further solid progress in payrolls in the April jobs report and Claimed data may not capture the rate of labor market improvement. Advisor at Brean Capital in New York.
The state’s initial unemployment claims rose 16,000 to a seasonally adjusted 744,000 for the week ending April 3 compared to 728,000 the previous week. Data for the previous week has been revised to show 9,000 more applications received than previously reported.
Economists polled by Reuters had forecast 680,000 applications in the latest week. Some have speculated that school closures related to the spring break, the Easter holiday, and outages in some industries were the cause of the sudden increase.
Others believe the unprecedented increase in statements in March 2020, when shutdowns force nonessential businesses to be enforced in many states to slow the early wave of COVID-19 infection. First, making it difficult to adjust the data to the seasonal variations.
“We suspect that the seasonal correction is the main culprit behind the incredible volatility in claims data in recent weeks as the economy has passed its one-year decommissioning anniversary. from last spring, “said Michael Gapen, US chief economist at Barclays (LON 🙂 in New York.
Even so, unadjusted claims increased by 18,172 to 740,787 last week.
Some economists also believe that the expansion of benefits, including a $ 300 weekly government-sponsored subsidy and a program for freelancers, gigs, and others is not enough. The state’s eligibility for regular unemployment insurance programs has contributed to keeping claims high.
Weekly benefits and the Pandemic Unemployment Assistance (PUA) program will run through September 6th. Fraud, many backlog and backlog of records cement the system. Claims have dropped from a record 6,149 million in early April 2020, but are still more than double the pre-pandemic level. In a healthy job market, claims range from 200,000 to 250,000.
Including the PUA program, 892,539 people filed complaints last week, leaving less than one million for the third consecutive week.
The increase in the number of applications led by California and New York. There have been huge declines in Alabama and Georgia, as well as Ohio, which have been besieged by fraud apps.
Shares on Wall Street traded higher, with record highs. The dollar fell against a basket of currencies. The price of the US Treasury increased.
The labor market stumbled in December but regained its foothold thanks to the White House’s massive $ 1.9 trillion pandemic rescue package and the accelerating COVID-19 vaccination rate, are allowing more service businesses to be active again.
In the minutes of the Federal Reserve’s March 16-17 policy meeting released Wednesday, US central bank officials acknowledged the improvement in labor market conditions and “anticipation. Ants will continue to increase sharply over the coming months and in the medium term. “
Some Fed officials say the latest bailout package “could accelerate recovery, possibly helping to limit more lasting damage in the labor market caused by the pandemic.”
Anecdotal evidence suggests that companies are recalling workers laid off during the pandemic and hiring new employees. A survey by the Institute of Supply Management on Monday found service businesses reported that they “recalled everyone who gave up and made new hires” and had “added employees to serving the needs of new customers in new locations. “
However, the labor market’s recovery still has a long way to go. Employment is lower than its February 2020 peak of jobs at 8.4 million.
The claim report also showed that the number of people receiving benefits after the first week of aid dropped 16,000 to 3,734 million in the week ending March 27th. This number has dropped from 23.1 million. people at the height of the crisis.
The 12th consecutive weekly drop in the so-called continuation of the claim was likely due to people looking for work and exhausting pension eligibility, limited to 26 weeks at most all states. About 5,634 million people received extended benefits in the week ending March 20, an increase of 117,108 from the previous week.
Another 786,962 people are in the state program for those who have exhausted their initial aid for six months, down 230,780 from the previous week. 18.2 million received benefits under all programs for the week ending March 20.
Sarah House, Senior Economist at Wells Fargo (NYSE 🙂 in Charlotte, North Carolina.