Unemployment Unexpectedly Climbs Despite Reopening
The number of new weekly jobless claims increased to 770,000 for the week ending March 13, according to the Department of Labor.
Econoday polled economists, who expected a decrease to 700,000. The previous week’s figure was originally registered at 712,000, but it was later updated to 725,000.
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Since unemployment claims fluctuate from week to week, analysts prefer to look at the four-week average. This dropped to 746,250, a decrease from the previous week’s upwardly updated average of 762,0000.
Unemployment claims, which are a proxy for layoffs, are still at record highs. Prior to the pandemic, the largest claim total was 695,000, which occurred in October 1982. Jobless claims peaked at 665,000 in March 2009, at the height of the financial crisis recession.
Even when there is a high demand for jobs, many companies will reduce their workforce as market conditions change.
However, in a tight labor market, those workers quickly find work, and many never appear on the payroll. What seems to be happening now is that many people who lose their jobs are unable to find new work quickly and are forced to file for unemployment insurance.
For the week ending March 27, claims reached a new high of 6.87 million, more than ten times the previous high. Each week during the spring and early summer had seen a decrease in claims. However, the labor market began to plateau in late July, and claims remained about one million during August, a number never seen before the pandemic.
In September, claims began to decline again, and they had been making slow but steady progress until the election and the resurgence of Covid-19 infections.
Continuing claims, which are published a week later, were at 4.124 million, the lowest since the pandemic started.
For the week ending February 27, the total number of continued weeks claimed for benefits in all services—including new programs for gig employees and business owners—was 18,216,463, down nearly 1.9 million from the previous week.
Pennsylvania (6.1), Alaska (5.6), Nevada (5.4), the Virgin Islands (5.1), Connecticut (5.0), New York (4.7), Rhode Island (4.5), Illinois (4.4), Massachusetts (4.4), and California had the highest insured unemployment rates in the week ending February 27. (4.2).
The economy is doing much better than anticipated, according to critics of the $1.9 trillion stimulus bill, and the need for deficit spending is diminishing. President Biden, on the other hand, is scheduled to sign the bill into law on Friday.