CHICAGO (NewsNation Now) — The number of Americans filing new claims for unemployment benefits rose last week to 719,000, signaling that many employers are still cutting jobs even as more businesses reopen, vaccines are increasingly administered and federal aid spreads through the economy.
The U.S. Labor Department released its latest figures Thursday, showing that claims increased by 61,000 from the week prior.
Though the pace of applications has dropped sharply since early this year, they remain high by historical standards: Before the pandemic flattened the economy a year ago, jobless claims typically ran below 220,000 a week.
That compared to 658,000 claims in the prior week, which were the fewest since the middle of March 2020 when mandatory closures of non-essential businesses such as restaurants, bars and gyms were being enforced across many states to slow the first wave of COVID-19 infections.
“As if we needed a reminder that nothing is a straight line along this pandemic journey, both with cases and the economy, we see new claims rising in the latest snapshot,” said Mark Hamrick, Bankrate.com‘s senior economic analyst.
“Collectively, we are looking for a rapidly improving environment reflecting better trends on a number of fronts,” continued Hamrick. “These include big increases in the pace and supply of COVID-19 vaccinations, continuing federal stimulus payments and the reopening of the economy across the country.”
The number of Americans receiving traditional unemployment benefits decreased to nearly 3.8 million, a decline of 46,000. If you include federal programs that are meant to help the unemployed through the health crisis, 18.2 million people were receiving some type of jobless aid in the week that ended March 13.
The labor market appears to have turned the corner after shedding 306,000 jobs in December, thanks to the acceleration in the pace of vaccinations, which is allowing more businesses to reopen. The White House’s massive $1.9 trillion pandemic relief package is sending additional $1,400 checks to qualified households and extending the government safety net for the unemployed through Sept. 6, boosting consumer spending.
“There’s a very good chance in the coming months that the recovery of the economy will be better than expected given pent-up demand and substantial savings held by many individuals with improving consumer confidence,” Hamrick said.
But the labor market is still a long way from full recovery. Jobless claims remain above their 665,000 peak during the 2007-09 Great Recession. In a healthy labor market, claims are normally in a 200,000 to 250,000 range.