Weekly jobless-aid claims decline
U.S. reports 42,000 drop to 712,000 as states ease restrictions
New applications for U.S. jobless benefits fell by more than forecast last week to the lowest level since early November as covid-19 vaccinations accelerated and states eased more business restrictions.
Initial claims in regular state programs fell by 42,000 to 712,000 in the week that ended Saturday, Labor Department data showed Thursday.
In a separate report Thursday, the department said there were 6.9 million job openings posted on the last day in January, up from 6.7 million in December. That suggests employers are getting ready to hire in the coming months.
Hiring picked up in February as U.S. employers added a robust 379,000 jobs, the most since October, reflecting an economy in which consumers are spending more and states and cities are easing business restrictions. Thursday’s unemployment figure, though the lowest weekly figure in four months, showed that weekly applications for jobless benefits still remain high by historical standards: Before the viral outbreak, they had never topped 700,000,
even during the 2008-2009 recession.
Though the job market has been slowly strengthening, many businesses remain under pressure, and 9.6 million jobs remain lost to the pandemic that flattened the economy 12 months ago.
All told, 4.1 million Americans are receiving traditional state unemployment benefits. Counting supplemental federal unemployment programs that were established to soften the economic damage from the virus, an estimated 20.1 million people are collecting some form of jobless aid.
More than 4 million people have dropped out of the labor force, a group not included in the most widely cited unemployment rate.
“We’re still not yet at the phase of the recovery where we’re seeing the floodgates open up,” said Daniel Zhao, senior economist with the career site Glassdoor. “I don’t think it’s quite fair to call what we’ve done so far ‘reopening’ because there’s still a lot of people who are out of work and a lot of businesses that are closed.”
The continuing job cuts reflect the extent to which the pandemic disrupted normal economic activity and kept consumers hunkered down at home rather than out traveling, shopping, dining out and attending entertainment venues. Cities and states restricted the hours and capacity of restaurants, bars and other businesses. Even where restrictions didn’t exist, many Americans for months chose to stay home to avoid the risk of infection.
Now, though, as vaccinations are increasingly administered around the country, business restrictions are gradually eased and consumers grow more comfortable engaging face to face with others, optimism about the economy is rising. Last month, consumers bounced back from months of retrenchment to step up their spending by 2.4% — the sharpest increase in seven months and a sign that the economy may be poised to sustain a recovery.
In the meantime, the number of confirmed new covid-19 cases has dropped to an average of about 50,000 a day from nearly 250,000 in early January.
A brightening outlook for the economy was reinforced Thursday, when President Joe Biden signed a $1.9 trillion covid-19 relief bill that will provide $1,400 payments to most adults and extend $300 weekly unemployment benefits into early September. The legislation will also provide money for viral vaccines and treatments, school reopenings, state and local governments and ailing industries ranging from airlines to concert halls.
Many economists suggest that the combination of substantial federal aid, a rising pace of vaccinations, continually low borrowing rates and the increased willingness of consumers to spend will unleash a robust economic recovery later this year. Still, defeating the coronavirus remains vital to achieving a full recovery of the economy and the job market.
“These are welcome policies, but they are still temporary relief,” said Ann Elizabeth Konkel, economist at the Indeed Hiring Lab. “To fully heal the labor market, the public health situation must be under control. Coronavirus started this mess and continues to cause massive economic damage on a daily basis.”
Despite signs of improvement in the economy, business is far from normal. The data firm Womply reports that 63% of movie theaters, live music venues and other entertainment establishments remain closed, along with 38% of bars and 35% of hair salons and other beauty businesses.