Layoffs within the US are nonetheless excessive, however the pattern spells restoration | Enterprise and Economic system Information
The U.S. labor market still has a long way to go to regain its pre-pandemic strength, and while the headline on the recent snapshot of the U.S. labor market may be disappointing, a deeper dive shows that the recovery trend is moving to the right.
The U.S. Department of Labor said Thursday that an additional 745,000 Americans applied to states for unemployment benefits last week – 9,000 more than in the previous week’s revised reading.
Severe winter storms in the southern United States in mid-February were likely a factor in the increase.
The four-week moving average, which compensates for the inevitable noise of weekly readings, was 790,750, down 16,750 from the previous week’s revised average.
For the week of February 20, the number of Americans currently on unemployment benefits – known as ongoing entitlements – was 4,295,000, nearly 100,000 fewer than the previous week.
Weekly unemployment claims are a substitute for layoffs well above their pre-pandemic peak of 665,000 in March 2009.
To give you an idea of how much ground the job market will have to catch up just before the coronavirus pandemic hit the U.S. coast, jobless claims averaged just over 200,000 per week.
Of the roughly 22 million jobs lost during the lockdowns in March and April last year, only about 12 million were restored.
Many forecasters believe the nation’s labor market will not be fully healed until 2024.
The labor market is lagging behind the broader economic recovery. However, the four-week moving average and ongoing claims show that the labor market is picking up again after a brutal December and January as COVID-19 cases raged across the country and business restrictions put in place.
New COVID-19 infections are now in decline, while the nationwide vaccination drive, while not perfect, is also in full swing.
This suggests that the far more comprehensive February monthly U.S. employment report due Friday could show a modest spike in job creation after the economy shed 227,000 jobs in December and created another 49,000 jobs in January.
“While we believe the labor market is about to recover and look for the February employment report showing 284,000 jobs growth, the damage data reminds us that the labor market remains weak and a full cure will take several years to process” said Nancy Vanden Houten, senior US economist with Oxford Economics.
Data suggests that the job market could soon have the wind on its back.
US household incomes rose 10 percent in January – the second largest jump in history – thanks in large part to the $ 900,000 round of virus aid passed by Congress in December.
This contributed to a surge in retail sales in January – vital to the health of the economy as around two-thirds of US growth is driven by consumer spending.
Additionally, another economic boom is almost certain to come as President Joe Biden’s proposal for a $ 1.9 trillion stimulus package winds its way through Congress.
And states are starting to lift restrictions on pandemics as COVID-19 infections stabilize and trend lower.
Texas Governor Greg Abbott announced Tuesday an executive order that will allow businesses in the state to reopen fully.
Consumers are also more hopeful about their job prospects.
The Conference Board’s latest consumer confidence index showed Americans are feeling better in the country’s job market. The percentage of those who say that jobs are “plentiful” is increasing, while the percentage of those who say that jobs are “hard to come by” is decreasing.