By Geoffrey Smith
Investing.com -- The number of people applying for jobless benefits stayed at an elevated level for another week, despite the first relaxations of measures designed to stop the winter surge in Covid-19 cases.
The Labor Department said that 745,000 people filed initial jobless claims last week, fractionally below expectations for 750,000 but up slightly from a revised total of 736,000 last week. The biggest increase in initial claims was in Texas, with just under 18,000. The state had suffered disproportionately from the collapse of its energy system due to an extreme cold snap late last month.
The number of continuing claims, which are reported with a one-week lag, fell by 124,000 to 4.295 million. However, that number doesn't capture the full extent of underemployment caused by the pandemic and the lockdown measures taken to contain it.
The broadest measure of those claiming under federal and state programs, which include those set up specifically since the pandemic struck, showed a big improvement in the week through February 13, falling by over 1 million to 18.026 million.
"Two good weeks in this volatile series don’t prove anything," said Ian Shepherdson, chief economist with Pantheon Macroeconomics, in emailed comments, "but whatever happens next week, we expect the trend to fall sharply over the next few months, provided the new Covid variants don’t trigger a spring wave in cases and, more importantly, hospitalizations."
"The jury is still out," he added.
There were clearer signs of progress with the monthly Challenger Job Cuts survey, which fell by more than half from January's level to 34,531. That's the lowest level since before the pandemic erupted a year ago.
Hopes for a relatively swift decline in unemployment have risen in recent weeks as a series of states, most notably Texas this week, have lifted public health measures restricting businesses, which have hit the labor-intensive service sector particularly hard. However, a suite of Federal Reserve officials have pointed to a still-vast reservoir of unemployed and discouraged workers, noting that the prospect of full employment is still way off.
Employment in the U.S. is currently running some 10 million below where it was a year ago.