Jobless Claims Dip Below 800,000 in Sign of Labor Market Rebound

Jobless claims dip below 800,000 for the first time since November in a sign that the labor market may be slowly recovering from the grip of the pandemic.
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Jobless claims dipped below 800,000 for the first time since November last week in a sign the labor market may be slowly recovering from the grip of the pandemic.

The Labor Department reported Thursday that 779,000 Americans filed for first-time jobless benefits in the week ended Jan. 30, down from a revised 812,000 claims the week earlier. Economists polled by FactSet had expected claims of 865,000.

Continuing claims, which are the number of people not just filing but staying on unemployment benefits, came in at 4.592 million for the week ended Jan. 23, down from the previous week's revised 4.785 million, the Labor Department said.

Cold weather, a surge in Covid-19 infections and the threat of new, highly contagious variants of the virus have contributed to a broader winter slowdown that has kept businesses from not only hiring new workers but keeping workers on the job.

Indeed, until last week weekly claims had been steadily increasing since November, from below 800,000 to a post-holiday shopping-season high of 927,000 through the week of Jan. 9. First-time claims remain well above their pre-pandemic peak of 695,000 set back in 1982.

Part of the reason for the weekly numbers holding stubbornly high: Many Americans have stopped collecting regular jobless benefits and have switched to collecting pandemic-related assistance. 

On that front, some 7.217 million Americans claimed Pandemic Unemployment Assistance benefits through Dec. 5, while 3.603 million individuals claimed Pandemic Emergency Unemployment Compensation benefits.

To be sure, economists and market-watchers are hopeful that things will turn around. Washington's most recent $900 billion stimulus package already has been released, and Democrats are readying to approve President Joe Biden's $1.9 trillion in additional stimulus. The proposal would bolster unemployment aid, provide funds for vaccine distribution and send $1,400 checks to many Americans.

Meantime, the U.S. government said Wednesday that it will sell a record $126 billion in benchmark bonds this quarter as it attempts to cover a record budget deficit bloated by pandemic-related costs and legacy tax cuts.

A more comprehensive snapshot of the U.S. employment landscape will come Friday. Economists currently expect 100,000 jobs were added to the economy in January, with the unemployment rate holding at 6.7%