New jobless claims trend lower
National figures rise unexpectedly amid recovery
New Michigan jobless claims filed last week edged lower and closer to prepandemic levels, but new national claims for assistance unexpectedly rose.
Michigan workers filed 10,028 new claims for unemployment assistance for the week ending March 27, down slightly from the 12,765 adjusted new claims filed the week before, the U.S. Labor Department announced Thursday.
But new jobless claims unexpectedly rose nationally by 61,000 to 719,000, indicating that layoffs continue as the economy recovers from more than a year of pandemic-inflicted economic turmoil.
In Michigan, continuing claims also trended lower to 134,920 from 138,528 the previous week, but new and continuing claims remain roughly twice as high as their prepandemic levels.
While Michigan’s jobless numbers continue to slowly improve, the state’s official covered labor force is also smaller by 204,937, suggesting many people have stopped looking for work during the pandemic and are no longer counted in official unemployment numbers.
Economists monitor weekly applications for unemployment aid for early signs of where the job market is headed. Applications generally reflect the rate of layoffs, which normally fall steadily as a job market strengthens. During the pandemic, though, the numbers have become less reliable as states have struggled with application backlogs and allegations of fraud have clouded the actual volume of job cuts.
Still, measures of the overall economy show clear improvement from the collapse last spring, with the rising number of vaccinations encouraging people to return to airports, shopping centers, restaurants and bars. The number of new confirmed COVID-19 cases has dropped from an average of about 250,000 a day in early January to below 70,000, though it has begun to rise again in recent days.
Last month, consumer confidence reached a postpandemic peak. And the $1,400 checks in President Joe Biden’s $1.9 trillion economic relief plan have sharply lifted consumer spending, according to Bank of America’s tracking of its debit and credit cards. Spending jumped 23% in the third week of March compared with pre-pandemic levels, the bank said.
And even with the pace of layoffs still relatively high, hiring has begun to accelerate. In February, employers added a robust 379,000 jobs across the country. Last month, they are believed to have added even more: According to the data firm FactSet, economists expect the March jobs report being released today to show that the economy added a sizable 614,000 jobs and that the unemployment rate fell from 6.2% to 6%. Less than a year ago, the jobless rate had hit 14.8%.
Some economists are even more optimistic: Joe Brusuelas, chief economist at the tax advisory firm RSM, is predicting 1 million added jobs for March.
The Federal Reserve’s policymakers have substantially boosted their forecast for the economy this year, anticipating growth of 6.5% for 2021, up from an estimate in December of just 4.2%. That would be the fastest rate of expansion in any year since 1984.
Still, the economic impact of the pandemic lingers. The data firm Womply reports that 63% of movie theaters and other entertainment venues were closed last week, as were 39% of bars and 39% of hair salons and other beauty shops.