Unemployment claims climbed back above 800,000 last week as companies scaled back their rehiring of workers despite easing virus-related restrictions – another sign the labor market is struggling to recover from the worst of the pandemic.
The Labor Department reported Thursday that 861,000 Americans filed for unemployment benefits for the first time in the week ended Feb. 13, up from 848,000 upgraded claims the previous week. Economists polled by FactSet expected claims of 773,000.
Continuing claims, which is the number of people not only filing but remaining on unemployment benefits, stood at 4.49 million for the week ended February 6, down from the week’s revised 4.56 million. previous year, the Labor Department said.
Winter storms that affected Texas and other parts of the country were not part of the most recent tally. However, the cold weather as well as the threat of new, highly contagious variants of the virus contributed to a broader winter downturn that prevented companies from not only hiring new workers, but also from keeping workers on the job.
“This isn’t the direction you want to see UI claims going, but keep in mind this might be a small bump in the road as the pace of vaccinations continues to pick up and cases are declining across the country,” said Mike Loewengart, chief executive. , Investment strategy with E*TRADE Financial.
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Unemployment claims – an indicator of layoffs – remain above the pre-coronavirus pandemic peak of 695,000, but fell by 926,000 in early January.
Part of the reason the numbers continue to remain high is that many Americans have stopped collecting regular unemployment benefits and shifted to collecting state-run pandemic aid.
On that front, some 7.685 million Americans have claimed Pandemic Unemployment Assistance benefits through Jan. 23, while 4.061 million people have claimed Emergency Unemployment Compensation benefits in the event of pandemic.
To be sure, additional stimulus along with a broader rollout of vaccinations should largely support the economy and, in turn, rehiring — something that, despite Thursday’s market decline, economists are already pricing in their views at long term.
“While the labor market remains under pressure, other segments of the economy are close to or above pre-COVID levels,” said E*TRADE Financial’s Loewengart. “Furthermore, when you factor in the willingness and ability of Congress to step in repeatedly to keep our economy going as we recover, it’s more than likely that a disappointing reading like this will be overlooked. .”