Jobless Claims Higher Than Expected, Climbing to 719,000

New weekly jobless claims rose 61,000 to 719,000 for the week that ended March 27, the Department of Labor said Thursday.

Economists surveyed by Econoday had forecast a decline to 680,000 from the previous week’s initial estimate of 684,000. The previous week’s level was revised down by 26,000 from 684,000 to 658,000

Jobless claims can be volatile week to week so economists like to look at the four-week average. This fell to 719,000, a decrease of 10,500 from the previous week’s revised average.  That is the lowest level for this average since March 14, 2020.

Continuing claims, which get reported with a week’s lag, fell to 3,794,000 in the week ended March 20, a decrease of 46,000 from the previous week.

Including new programs for gig workers and small business owners, the total number of continued weeks claimed for benefits in all programs for the week ending March 13—the most recent data available—was 18,213,575, a decrease of 1,517,926 from the previous week

Claims hit a record 6.87 million for the week of March 27, more than ten times the previous record. Through spring and early summer, each subsequent week had seen claims decline. But in late July, the labor market appeared to stall and claims hovered around one million throughout August, a level so high it was never recorded before the pandemic struck. Claims moved down again in September and had made slow, if steady, progress until the election and the resurgence of Covid-19 infections when they rose again. In the last few weeks, however, claims have once again been moving steadily downward.

Many states eased or eliminated restrictions on businesses, including restaurants and bars, in March. Forty-three states are now mostly open. This has led to a surge of economic activity. As well, the American Rescue Act authorized $1.9 trillion of stimulus money, although only a small fraction of that has been spent so far.

But infections have recently been rising, which could be a drag on workers seeking employment and hiring.

The largest increases in initial claims for the week ending March 20 were in Massachusetts (+11,386), Texas (+7,599), and Connecticut (+4,170).