WASHINGTON — The number of Americans applying for unemployment benefits edged higher last week to 745,000, a sign that many employers continue to cut jobs despite a drop in confirmed viral infections and evidence that the overall economy is improving.
Thursday's report from the Labor Department showed that jobless claims rose by 9,000 from the previous week. Though the pace of layoffs has eased since the year began, they remain high by historical standards. Before the virus flattened the U.S. economy a year ago, applications for unemployment aid had never topped 700,000 in any week, even during the Great Recession.
All told, 4.3 million Americans are receiving traditional state unemployment benefits. Counting supplemental federal unemployment programs that were established to soften the economic damage from the virus, an estimated 18 million people are collecting some form of jobless aid.
Restrictions on businesses and the reluctance of many Americans to shop, travel, dine out or attend mass events have weighed persistently on the job market. Job growth averaged a
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On Friday, though, economists have forecast that the government will report a strong job gain for February of near 200,000, which would raise hopes that layoffs will slow. Optimism is rising that increasing vaccinations and a new federal rescue aid package that will likely be enacted soon will spur growth and hiring in the coming months. Many analysts foresee the economy expanding at an annual rate of at least 5
Already, crucial sectors of the economy are showing signs of picking up as vaccinations increase, federal aid spreads through the economy and the Fed’s low-rate policies fuel borrowing and spending. Last month, America’s consumers bounced back from months of retrenchment to step up their spending by 2.4% — the sharpest increase in seven months and a sign that the economy may be poised to sustain a recovery.
The solid gain suggested that many people were growing more confident about spending, especially after receiving $600 checks that went to most adults early this year in a federal economic aid package. Additional relief is likely for American households and businesses as Congress considers President Joe Biden’s proposal for a new aid package amounting to $1.9 trillion.
At the same time, rising bond yields in the financial markets are pointing to worries that higher inflation could be on the way as the economy recovers. This week, Lael Brainard, a member of the Fed’s Board of Governors, sought to calm investors by stressing that the Fed, while generally optimistic in its outlook, is still a long way off from raising interest rates or otherwise lessening its support for the economy.
Paul Wiseman, The Associated Press