The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, though the labor market recovery is gaining traction as economic activity picks up, driven by increased vaccinations and massive fiscal stimulus, APA reports citing Reuters.
Initial claims for state unemployment benefits totaled a seasonally adjusted 719,000 for the week ended March 27, the Labor Department said on Thursday.
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.
Economists polled by Reuters had forecast 680,000 applications in the latest week.
The labor market appears to have turned the corner after shedding 306,000 jobs in December, thanks to the acceleration in the pace of inoculations, 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.
A report on Thursday from global outplacement firm Challenger, Gray & Christmas showed job cuts announced by U.S.-based employers dropped 11% to 30,603 in March. That was the fewest since July 2018.