Claims rise at 1- year mark of pandemic

The surge in unemployment filings in March 2020 provided one of the first clear warnings of the havoc the pandemic was wreaking on the U. S. economy. One year later, that klaxon is still blaring.

What happened

More than 746,000 people filed first- time applications for state unemployment benefits last week, up 24,000 from the previous week, the Labor Department said Thursday. Another 282,000 filed for Pandemic Unemployment Assistance, an emergency federal program that covers freelancers, self- employed workers and others who don’t qualify for benefits in normal times. Neither total is adjusted for seasonal trends. On a seasonally adjusted basis, the figure for initial state claims was 770,000.

Why it matters

Last week was the 52nd straight with elevated unemployment filings. In one week in March 2020, applications jumped tenfold, from fewer than 300,000 to about 3 million. A week later, they topped 6 million as businesses across the country shut down.

The figures have fallen significantly since then but remain higher than in any previous recession, at least by some measures. And progress has stalled: Initial weekly claims under regular and emergency programs, combined, have been stuck at just above 1 million since last fall.

“It goes up a little bit, it goes down, but really we haven’t seen much progress,” said Annelizabeth Konkel, an economist for the career site Indeed. “A year into this, I’m starting to wonder, what is it going to take to fix the magnitude problem? How is this going to actually end?”

What’s next

Most forecasters expect the labor market recovery to accelerate in coming months, as warmer weather and rising vaccination rates allow more businesses to reopen, and as new government aid encourages Americans to go out and spend. Policymakers at the Federal Reserve said Wednesday that they expect the unemployment rate to fall to 4.5% by the end of the year, a significant upgrade over the 5% they forecast three months ago.