CHICAGO (NewsNation Now) — The number of Americans applying for unemployment benefits rose last week to 770,000, an unexpected increase as the labor market regains its footing with more residents getting vaccinated and businesses reopening.
The U.S. Labor Department released its latest figures Thursday, showing that last week’s jobless claims increased by 45,000 from 725,000 the week prior.
The numbers have dropped sharply since the depths of the recession last spring but still show that employers in some industries continue to lay off workers. Before the pandemic struck, applications for unemployment aid had never topped 700,000 in any one week.
“New jobless claims posted a disappointing increase in the latest week, rising to a higher-than-expected level,” said Mark Hamrick, Bankrate.com‘s senior economic analyst. “Speaking to the widespread challenges caused by the year-old economic downturn, some 18 million Americans received some form of jobless assistance in the latest week.”
The four-week average of claims, which smooths out weekly variations, dropped to 746,000, the lowest since late November.
A total of 4.1 million people are continuing to collect traditional state unemployment benefits, down 18,000 from the previous week. Including separate federal programs that are intended to help workers displaced by the health crisis, 18.2 million Americans were receiving some form of jobless aid in the week of Feb. 27, down by 1.9 million from the week before.
The continuing layoffs are occurring even as the overall job market has shown solid improvement. Last month, U.S. employers added a robust 379,000 jobs, the most since October and a sign that the economy is strengthening as consumers spend more and states and cities ease business restrictions.
With vaccinations accelerating, hopes are rising that Americans will increasingly travel, shop, eat out and spend freely after a year of virus-induced restraint.
The United States had administered more than 113 million doses of COVID-19 vaccines in the country as of Wednesday morning and distributed more than 147 million doses, according to the U.S. Centers for Disease Control and Prevention. The faster pace of inoculations should allow for broader economic re-engagement, even as the rate of decline in new coronavirus infections has leveled off.
President Joe Biden’s $1.9 trillion relief package is also expected to help accelerate growth, especially with most adults this week receiving $1,400 stimulus checks that should fuel more spending. An extension of $300 weekly unemployment benefits into early September will provide support, too, along with money for vaccines and treatments, school re-openings, state and local governments and ailing industries ranging from airlines to concert halls.
Yet the nation is still 9.5 million short of the number of jobs it had in February 2020. And Federal Reserve Chair Jerome Powell suggested Wednesday after the Fed’s latest policy meeting that the overall economic outlook remained cloudy.
“The state of the economy in two or three years is highly uncertain,” Powell said at a news conference after the Fed signaled that it expects to keep its key interest rate near zero through 2023 despite some solid economic gains and concerns about rising inflation pressures.
Hamrick said its “time for some introspection.”
“Now, seemingly braced for an upswing, we find ourselves armed with hope of not just an improving, but a likely booming economy. Between economic stimulus and a quickening pace of COVID-19 vaccinations, many are – or will be – strengthened by newly obtained immunity and injections of cash,” he said. “But we aren’t quite there yet.”
The Associated Press and Reuters contributed to this report. Reporting by Reuters’ Lucia Mutikani and AP’s Paul Wiseman.