The economy continues to slowly rebound from the worst of the pandemic, but claims for unemployment benefits remain high by historical standards, a sign of how long it will take for the job market to recover fully.
Initial jobless claims rose last week, the Labor Department reported Thursday, after a big drop in the previous week.
A total of 748,000 workers filed first-time claims for unemployment benefits in the week that ended Feb. 27, 32,000 higher than the week before. In addition, 437,000 new claims were filed for Pandemic Unemployment Assistance, a federal program covering freelancers, part-timers and others who do not routinely qualify for state benefits, a rise of 9,000.
Neither figure is seasonally adjusted. On a seasonally adjusted basis, new state claims totaled 745,000, an increase of 9,000.
Claims are lower than they were when coronavirus cases spiked early last year. With the virus easing since then in many places, some restrictions on business activity have been rolled back. That has helped the job market somewhat.
Gov. Greg Abbott of Texas said Tuesday that the state was lifting all restrictions on business and eliminating its mask requirement, moves that drew criticism from President Biden. Elsewhere, officials have been more cautious — in Chicago, parks and playgrounds reopened, while in Massachusetts, capacity restrictions on restaurants have been lifted.
“The labor market is continuing to gradually improve,” said Scott Anderson, chief economist at Bank of the West in San Francisco. “Job growth will accelerate, perhaps as soon as the second quarter, with decent gains in leisure and hospitality and travel.”
Even so, the number of new filers remains extremely high by historical standards, a sign of just how entrenched the pandemic remains one year after it first struck.
Another reading will come Friday, when the Labor Department reports on hiring and unemployment in February. Economists expect the survey to show a gain of 200,000 jobs, with the unemployment rate unchanged at 6.3 percent.
In January, the job market hit a soft spot, with employers adding just 49,000 positions. That offered little hope to the nearly 10 million Americans out of work. But conditions should improve in the coming months, economists say, with vaccination efforts gaining speed and another relief package nearing passage on Capitol Hill.
Mr. Anderson expects annualized growth of 7.2 percent in the second quarter (1.75 percent on a quarterly basis), paced by consumer spending and the aid infusion from Washington.
“The amount of sheer spending by the government is moving the needle,” he said. By summer, spending should return to pre-pandemic levels, he said, but it could take another two years for the labor market to recover fully.