WASHINGTON—Fewer Americans filed new claims for unemployment advantages final week amid falling COVID-19 infections, however the near-term outlook for the labor market is unclear after winter storms wreaked havoc within the South area in the course of this month.
Initial claims for state unemployment advantages totaled a seasonally adjusted 730,000 for the week ended Feb. 20, in comparison with 841,000 within the prior week, the Labor Department stated on Thursday. Economists polled by Reuters had forecast 838,000 functions within the newest week.
Claims have been out of sync with an enchancment in general financial circumstances because the winter coronavirus wave recedes and $900 billion in further pandemic reduction cash supplied by the federal government on the finish of December flows by means of the economic system.
Daily coronavirus instances and hospitalizations have dropped to ranges final seen earlier than the Thanksgiving and Christmas holidays, permitting extra companies companies to reopen. Retail gross sales elevated by essentially the most in seven months in January. Consumers’ perceptions of the labor market additionally improved this month.
The persistently increased claims have been partially blamed on fraud in Ohio. A world semiconductor chip scarcity has compelled short-term closures and shift reductions at some motorized vehicle meeting crops. In the approaching week, claims may very well be boosted by the stormy climate within the South, which left massive components of Texas at the hours of darkness and with out water for days.
“Measurement issues in the unemployment insurance data are not becoming any less problematic as time goes on,” stated Lou Crandall, chief economist at Wrightson ICAP in Jersey City.
Though claims have dropped from a document 6.867 million final March when the pandemic hit the United States’ shores, stay above their 665,000 peak through the 2007-09 Great Recession.
Federal Reserve Chair Jerome Powell informed lawmakers this week that the U.S. central financial institution would maintain rates of interest low and proceed to pump cash into the economic system by means of bond purchases “at least at the current pace until we make substantial further progress towards our goals (maximum employment and inflation).”
A resurgence in COVID-19 infections in direction of the tip of final 12 months and delays in offering extra fiscal stimulus sapped appreciable momentum from the economic system within the fourth quarter, different knowledge on Thursday confirmed.
Gross home product elevated at a 4.1 % annualized charge, the Commerce Department stated in its second estimate of fourth-quarter GDP progress. That was a slight upward revision from the 4.0 % tempo reported final month. The economic system grew at a document 33.4 % charge in third quarter.
The economic system’s struggles within the remaining three months of 2020 are principally within the rear view mirror. The sharp rebound retail gross sales and President Joe Biden’s huge $1.9 trillion restoration package deal, which is gaining traction within the U.S. Congress, have prompted economists to spice up their first-quarter progress estimates to as excessive as a 6 % charge from as little as a 2.3 % tempo.
By Lucia Mutikani