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Economic Report: U.S. unemployment claims rise slightly to 745,000 after Texas power outages

Economic Report: U.S. unemployment claims rise slightly to 745,000 after Texas power outages

2021-03-04 14:17:00
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The numbers: The number of new claims for U.S. unemployment benefits rose slightly to 745,000 in late February, indicating that the economy is still a long way from recovering all the jobs lost during the coronavirus pandemic.

Initial unemployment claims traditionally filed through the states increased by 9,000 to 745,000 in the week ending February 27. the government said Thursday

Economists polled by Dow Jones and The Wall Street Journal had predicted that new claims would total 750,000 for seasonality.

Another 436,696 claims for benefits were submitted through a temporary federal aid program.

The claims data has been erratic and unreliable lately due to fraud, processing issues, and bad weather, such as the Texas freak cold snap that caused severe power outages and shut down many businesses. New claims in Texas have risen sharply last week.

But even if the current figures were very accurate, it would show that the economy is still facing major layoffs.

If we add up the new state and federal claims, the government received 1.18 million claims for unemployment benefits last week, based on actual or unadjusted figures.

Combined claims should not fall below 1 million per week since May last year. Before the pandemic, new claims were in the low of 200,000, and they had not risen more than 695,000 in a single week.

See: A visual look at how an unfair pandemic has changed work and life

What happened: New claims for unemployment benefits rose the most in Texas, Ohio and New York. Missouri was the only state to report a major decline.

The number of people already receiving traditional unemployment benefits fell by 124,000 to 4.3 million, adjusted for seasonal effects. These claims are reported with a two-week delay.

Another 4.47 million people who exhausted state compensation received benefits through an emergency program funded by the federal government. That was 600,607 lower than the week before.

In total, the number of people who reportedly received benefits from eight separate state and federal programs were reported at an unadjusted 18 million on Feb. 13, down 1.01 million from the previous week. Less than 2 million people were on benefits before the pandemic broke.

Read: Inflation concerns are back. Should you be concerned?

Note to readers: A government investigation has shown that the number of individuals receiving benefits has been inflated by fraud and double counting. Economists say they should pay attention to the direction of claims rather than the totals.

Read: Unemployment claims have been inflated, GAO believes

Also: Why the Inaccurate Unemployment Claim Report Is Still Helpful to Investors

The big picture: The economy is still losing many jobs, but the tide appears to be turning. States are lifting business restrictions, more people are getting vaccinated and the federal government is about to approve nearly $ 2 trillion in additional stimulus measures.

The economy is likely to accelerate quickly and put more people back to work, especially if the coronavirus continues to decline.

What do they say? Stronger growth momentum as the economy continues to reopen will create a large number of jobs, although a full recovery is likely to be a lengthy process, ”said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

Market reaction: The Dow Jones Industrial Average
DJIA,
-0.39%

and S&P 500
SPX,
-1.31%

would open narrowly mixed in Thursday trades.

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