Unemployment Weekly Claims Decrease Slightly to 793,000, but Are More than Anticipated
The number of unemployment weekly claims decreased slightly to 793,000 but were still higher than expected.
First-time filings for unemployment insurance were expected to total 760,000 last week, according to economists surveyed by Dow Jones, according to CNBC.
In the week ending Feb. 6, the 793,000 first-time filers represent a decrease of 19,000 from the previous week’s revised level. The previous week’s level was revised up by 33,000, from 779,000 to 812,000, according to the Labor Department.
While the decrease is encouraging, the numbers are still a far cry from pre-pandemic figures, reflecting the ongoing devastating effects of the pandemic. First-time unemployment benefit filers had typically numbered only about 225,000 weekly. For example, for the week ending Feb. 15, 2020, the figure stood at 215,000 claims, according to the Labor Department.
Last week, the private sector employment bounced back from its disastrous previous month and increased by 174,000 jobs from December to January, according to the January 2021 ADP National Employment Report.
In remarks yesterday, Fed chairman Jerome Powell said that while the published unemployment rate has fallen relatively swiftly, reaching 6.3% in January, “unemployment rates during COVID have dramatically understated the deterioration in the labor market. Most importantly, the pandemic has led to the largest 12-month decline in labor force participation since at least 1948.”
“Fear of the virus and the disappearance of employment opportunities in the sectors most affected by it, such as restaurants, hotels and entertainment venues, have led many to withdraw from the workforce. At the same time, virtual schooling has forced many parents to leave the workforce to provide all-day care for their children. All told, nearly five million people say the pandemic prevented them from looking for work in January,” he said.
He added that the recovery continues to depend on controlling the spread of the virus. “Extended periods of unemployment can inflict persistent damage on lives and livelihoods while also eroding the productive capacity of the economy. And we know from the previous expansion that it can take many years to reverse the damage.”
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