New US jobless claims bump higher to 745,000

New claims for unemployment benefits rose to 745,000 last week as the pandemic continued to weigh on the US labour market even while some coronavirus restrictions were eased.

The number of jobless claims filed for regular state programmes increased by 9,000 in the week ending February 27, from 736,000 the previous week, the US labour department said on Thursday. Economists had expected claims to rise to 750,000.

The small increase came after last week’s jobless claims fell to their lowest level in three months. Economists expected the previous week’s report had overstated the decline, however, since Texas, the second-most populous American state, and much of the central US were hit with a severe winter storm that affected new filings.

The report also showed a rise of 9,246 in claims for federal pandemic unemployment assistance — which includes gig workers and the self-employed — to 436,696 on an unadjusted basis.

The uneven nature of the labour market recovery has provided an impetus for President Joe Biden’s $1.9tn fiscal stimulus package. Biden and Democratic leaders have reached a compromise that would limit eligibility for $1,400 stimulus cheques ahead of a Senate vote on the legislation.

Economists hope that the US economic rebound will speed up as vaccines are distributed more widely. The Biden administration has accelerated its vaccine timeline and now expects there to be enough doses to inoculate every adult in the country by the end of May — two months earlier than previously announced — as it hopes to turn the corner on the fight against the pandemic, which has killed more than 508,000 Americans. 

The vaccine rollout and the recent decline in coronavirus cases and hospitalisations continue to support the gradual reopening of the US economy. Texas and Mississippi this week threw open the doors for businesses, ending all capacity curbs for companies to bolster their economies.

That has alarmed some public health officials, however, who are concerned that the decline in new infections is starting to stall. Biden slammed the reopenings as a “big mistake”. 

The new claims figures come ahead of Friday’s non-farm payroll report, which is expected to show the US economy added 182,000 jobs and the unemployment rate held steady at 6.3 per cent in February. 

More than 18m Americans continue to seek jobless benefits almost a year after the pandemic led to widespread lockdowns and a steep economic contraction.

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