Initial Jobless Claims Hold Steady Near Three-Month Low

Young adult working from Home during COVID-19 Quarantine Lockdown

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The number of people initiating claims for unemployment insurance increased only slightly last week, beating economists’ more dour expectations and staying near a three-month low.  

In the week through Feb. 27, initial unemployment claims increased 9,000 to 745,000, data released Thursday by the U.S. Department of Labor showed. Economists had expected a bigger bounce, forecasting an increase to 782,685, according to the median estimate cited by Moody's Analytics.

Despite the uptick, it was one of the better weeks for unemployment claims since the COVID-19 pandemic began, and marks the second straight week under 800,000. The week before  (ending Feb. 20) was the best in the last three months.

Still, these are small steps for a stalled labor market recovery. Weekly claims have continued to be at least three times the normal rate before the pandemic. The next jobs report from the Bureau of Labor Statistics, due Friday, is expected to show the U.S. economy added 177,500 jobs in February, more than in January but just a fraction of the monthly growth seen as recently as October. A report Wednesday on private-sector job growth for February showed U.S. companies added just 119,000 jobs, fewer than the 174,000 economists expected. 

Despite the gloomy winter, economists are optimistic about the economic recovery later this year, thanks to plentiful government aid (like the pending third stimulus check before Congress now), a beefed-up vaccination effort and lots of pent-up consumer demand to spend.