U.S. states are expected to have seen a drop in initial unemployment claims filings last week, albeit to a level that would still reflect a weak labor market compared to pre-pandemic conditions.
The Department of Labor is set to release its weekly report on new jobless claims on Thursday at 8:30 a.m. ET. Here are the main metrics expected from the report, compared to consensus data compiled by Bloomberg:
Initial jobless claims, week ended March 20:730,000 expected vs. 770,000 during the prior week
Continuing claims, week ended March 13:4 million expected vs. 4.124 million during the prior week
Initial unemployment claims likely held below 800,000 for a fifth straight week and declined after last week's unexpected jump in new claims. The year-over-year improvements will be even more pronounced: During the same week in 2020, new claims rocketed to more than 3 million as the pandemic's initial impacts reverberated across the labor market.
But while claims have come down considerably from those highs, they remain sharply elevated from 2019 levels, when new claims averaged just over 200,000 per week. Plus, improvements have stagnated in recent months, and claims have yet to break below levels seen in November.
And based on the total of claimants counted across all unemployment programs, a staggering number of Americans remain out of work. As of the end of February, more than 18 million individuals were still claiming unemployment benefits of some form, including via the federal Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation program, which offers extended benefits to those who have exhausted their regular state insurance.
The slow march forward for labor market progress has not been lost on policymakers. In congressional testimony on earlier this week,Treasury Secretary Janet Yellen told the U.S. House Committee on Financial Servicesthat "we should be clear-eyed about the hole we're digging out of" even as the data shows some signs of recovery, given that the country is still down by nearly 10 million jobs compared to its pre-pandemic peak.
Still, many economists are optimistic the rebound will pick up momentum in the coming weeks and months, especially with the vaccination program accelerating across the country.
"With the increased pace of COVID-19 vaccinations, federal stimulus spending and winter’s grip easing across much of the country, it is quite reasonable to harbor upbeat expectations for the U.S. economy," Mark Hamrick, senior economist analyst at Bankrate, wrote in a note. "This should be reflected in more of the economic data in the months ahead."