First claims for unemployment benefits soared to 861,000 last week, in a setback to the recovery in the US labor market after a wintery Covid-19 wave.
The number of jobless claims filed for regular state programs increased by 13,000 in the week ending Feb. 13, from 848,000 the week before, the US Labor Department said Thursday. Economists had expected the claims to drop to 765,000.
That came along with an increase from 174,247 in federal pandemic unemployment assistance (PUA) claims – including gig workers and the self-employed – to 516,299.
More than 18 million Americans are seeking jobless benefits 11 months after the pandemic started, even as the US government continues to roll out vaccines in hopes of turning the page on the crisis.
US President Joe Biden is also urging Congress to approve his $ 1.9 billion stimulus plan, saying the economy would “roar back” if aid were approved. One-time stimulus payments made in December, part of the $ 900 billion support package approved late last year, helped January retail sales increase the most in seven months.
Republicans on Capitol Hill continue to oppose the idea of such a big bill, and some economists, including economist Larry Summers, have expressed concern about unhealthy inflation jumps due to Biden’s stimulus.
Still, Federal Reserve officials believe that the threat of slow inflation outweighs the danger of rapidly rising prices, and expect any rebound to be transitory. Fed Chairman Jay Powell has repeatedly stressed the importance of an accommodative monetary policy to support the labor market.
US employment remains nearly 10 million below pre-pandemic levels. Fed officials view the economy as “a long way from” the central bank’s goals and have warned that the road ahead “remains highly uncertain as the pandemic continues to pose significant risks to the outlook.”