New Jobless Claims Increase To 770,000 – Worse Than Expected

The number of Americans filing new unemployment claims increased to 770,000 last week as the economy continued to suffer the effects of the ongoing coronavirus pandemic, according to the Department of Labor.

The Bureau of Labor and Statistics figure released Thursday represented an increase in the number of new jobless claims compared to the week ending March 6, when 725,000 new jobless claims were reported. That number was revised up from the 712,000 jobless claims initially reported last week.

Roughly 18.2 million Americans continue to collect unemployment benefits, according to the report Thursday.

Economists expected Thursday’s jobless claims number to come in at 700,000, The Wall Street Journal reported. New jobless claims fell below 1 million in the first week of August, which was the first time the weekly claims had fallen below 1 million since March.

“The economy is on a very solid path,” Jim Baird, chief investment officer at Plante Moran Financial Advisors, told the WSJ. “Strong consumer spending should be the primary driver not only of growth in the economy, but improvement in labor-market conditions in the coming months.”

The U.S. added 379,000 jobs in February, a positive sign that the economy is recovering, according to Department of Labor data. The U.S. lost 140,000 jobs in December, the first jobs loss since April, and gained a modest 49,000 jobs in January.

The economy shrank 3.5% in 2020, according to a Jan. 28 Bureau of Economic Analysis report, the worst performance since the 1940s. However, the Organization for Economic Cooperation and Development projected that U.S. gross domestic product would surge 6.5% in 2021.

Jobless claims hovered around 200,000 per week before the pandemic, according to The WSJ.

Meanwhile, the U.S. stock market rallied to record highs Wednesday after the Federal Reserve said it wouldn’t raise interest rates through 2023, CNBC reported. The market has trended up recently due to the passage of Democrats’ $1.9 trillion stimulus package, increasing vaccine rates across the country and decreasing coronavirus cases.

Average coronavirus cases and deaths per million have declined in the last two months, according to Centers for Disease Control and Prevention. On Wednesday, the U.S. reported 995 new coronavirus-related deaths and 51,954 new cases.