The labor market in the United States still has a long way to go to regain its pre-pandemic strength, and while the numbers in the latest US labor market snapshot may be disappointing, a deeper dive reveals the trend recovery is moving in the right direction. direction.
The US Department of Labor said Thursday that an additional 745,000 Americans filed for unemployment benefits with states last week – 9,000 more than the revised reading from the previous week.
Severe winter storms in the southern United States in mid-February likely contributed to the increase.
But the four-week moving average – which dampens the inevitable noise of weekly readings – recorded 790,750, a decrease of 16,750 from the revised average of the previous week.
Meanwhile, the number of Americans currently collecting unemployment benefits – known as continuing claims – was 4,295,000 for the week ending February 20, nearly 100,000 fewer than the week before.
Weekly unemployment claims are a proxy for layoffs, which remain well above their prepandemic peak of 665,000 in March 2009.
To give you an idea of how much ground the job market needs to catch up, just before the coronavirus pandemic hit U.S. shores, job applications averaged just over 200,000 per week.
Of the roughly 22 million jobs lost in last year’s lockdowns in March and April, only around 12 million have been recovered.
Many forecasters believe the country’s labor market will not be fully healed until 2024.
The labor market is lagging behind the broader economic recovery. But the four-week moving average and lingering claims show the job market is accelerating again after a brutal December and January, when COVID-19 cases were unleashed across the country, ushering in restrictions that were undermining deals.
New COVID-19 infections are now on a downward trend, while the national vaccination campaign, while imperfect, is also well underway.
This suggests that the much more comprehensive monthly U.S. employment report for February, due Friday, may show a slight increase in job creation after the economy shed 227,000 jobs in December and added 49,000. in January.
“While we believe that a labor market recovery is underway and we wait for the February jobs report to show a gain of 284,000 jobs, the claims data reminds us that the labor market remains weak and a full recovery will take several years. Said Nancy Vanden Houten, chief US economist at Oxford Economics.
Meanwhile, data suggests the job market may soon be on the rise.
U.S. household incomes rose 10% in January – the second largest increase on record – thanks in large part to the $ 900,000 round of virus aid that Congress passed in December.
This contributed to a surge in retail sales in January, which is crucial for the health of the economy, as about two-thirds of US growth is driven by consumer spending.
Plus, another economic boost is almost surely in the cards, as President Joe Biden’s proposed $ 1.9 trillion stimulus bill travels through Congress.
And states are starting to lift restrictions on the pandemic as COVID-19 infections stabilize and trend down.
Texas Governor Greg Abbott on Tuesday announced an executive order allowing the state’s businesses to fully reopen.
Consumers are also more optimistic about their employment prospects.
The Conference Board’s latest Consumer Confidence Index showed that Americans are feeling better about the nation’s job market, with the percentage of those who say jobs are “plentiful” increasing, while the percentage of those who do. claim that jobs are “hard to get” is declining.