US jobless claims plunge in latest week

People who lost their jobs wait in line to file for unemployment following an outbreak of the coronavirus disease, at an Arkansas Workforce Centre April 6, 2020. — Reuters pic
People who lost their jobs wait in line to file for unemployment following an outbreak of the coronavirus disease, at an Arkansas Workforce Centre April 6, 2020. — Reuters pic

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WASHINGTON, Feb 25 — New applications for US unemployment benefits plunged last week to the lowest level since late November, according to government data released today, a hopeful sign for the jobs recovery.

However, economists were reluctant to declare victory since total aid including workers receiving special pandemic assistance remains at over a million.

First-time jobless claims fell by 111,000 in the week ended February 20, to 730,000, seasonally adjusted, the Labor Department reported.

And filings for one pandemic program created for workers not eligible for normal state unemployment benefits fell 161,000 to 451,402, according to the report.

“The drop may be signaling a turnusa

ing point for labor market conditions. However, the data continue to suffer from noise related to issues of backlogs and fraud,” said Nancy Vanden Houten of Oxford Economics.

“We expect a more sustainable labour market recovery to take hold closer to mid-year with broader vaccine distribution and the arrival of more fiscal support.”

Jobs gains have picked up as more businesses have gradually reopened and vaccine programmes accelerate, with the US unemployment rate falling to 6.3 per cent in January.

However, through February 6 more than 19 million workers were still receiving benefits under all programmes, including those for gig workers, the Labor Department data showed.

Robert Frick, corporate economist at Navy Federal Credit Union, said the key benchmark will be when weekly claims finally drop below 700,000 “on a sustained basis.”

Then “we can finally say real progress is being made in employing more Americans,” he said in a note. — AFP

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