Jobless Claims Add to Evidence of Stalled Recovery
One day ahead of the government's January jobs report, the latest figures for U.S. unemployment claims add to evidence the recovery in the labor market is stuck.
For the week through Jan. 30, the number of people initiating claims for unemployment benefits fell 33,000 from the previous week, dropping to 779,000, according to data released by the Department of Labor Thursday. While that was better than the 826,561 median estimate of economists polled by Moody's Analytics, weekly claims are “still alarmingly high,” according to Oxford Economics—running at three to four times pre-pandemic levels.
When it comes to restoring the jobs lost during the COVID-19 pandemic, the economic recovery has lost momentum this winter, with restrictions on activity tightening amid a surge in cases of the contagious virus. After recovering 9.3 million jobs in the early months of the pandemic, the economy added just over 3 million in the last five months of 2020, and December saw the first decline in jobs since April.
There are still almost 10 million fewer jobs than before the pandemic, and declines in the unemployment rate have stalled, stuck at 6.7% in November and December, almost twice pre-pandemic levels.
A Wednesday report on private sector employment showed payrolls rose 174,000 in January, the smallest increase since April excluding December’s drop of 78,000. That report is often relied on as an indicator of what’s to come in the government report, due Friday. Moody’s has forecasted a gain of 275,000 jobs, but its poll of economists predicted a smaller increase of 50,000 jobs.