First-time unemployment benefits showed an unexpected surge to 770,000 as the labor market tries to recover from the Covid-19 pandemic that sent more than 22 million Americans to the unemployment line a year ago, the Department of Labor reported Thursday.
Economists polled by Dow Jones had searched for a total of 700,000 for the week ending March 13th. The total corresponded to an increase compared to the 725,000 revised upwards from the previous week.
The report was made in the hopes that the U.S. labor market is showing real signs of a recovery from the coronavirus crisis, which has closed large parts of the economy or restricted activities, and which is particularly stressful for those who work in service-related professions was.
Texas, Florida, and Mississippi are among the states that either removed or greatly reduced restrictions due to the pandemic. Pennsylvania is expected to start tightening its business borders in early April, and other states are expected to follow suit after warnings from some health officials about reopening prematurely.
The ongoing claims a week behind the headline have barely changed at 4.12 million.
With coronavirus cases either falling or plateauing and hospital stays and deaths falling sharply, several states have started reopening again. Additionally, the US vaccination rate is around 2.4 million per day, which gives further hope that the effects of the pandemic on national health and the economy are wearing off.
A separate report from Thursday morning showed that manufacturing continues to recover strongly.
The Philadelphia Federal Reserve’s manufacturing outlook was 51.8, the percentage difference between companies reporting growth and companies reporting decline. It was the highest reading for the index since April 1973.
This week’s unemployment claims number includes the poll week the Bureau of Labor Statistics uses to produce its report on non-farm payroll, suggesting earnings could be dampened in March.
The economy has created 545,000 jobs so far in 2021, and the unemployment rate has fallen to 6.2%.
Despite the labor market gains, the Federal Reserve announced on Wednesday that it plans to continue its loose monetary policy in the future. The Fed said it will keep short-term lending rates near zero until the economy reaches full employment, which is inclusive across income, race and gender lines.
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