Jobless Claims Remain Below 800,000 as Businesses Slowly Rehire

Jobless claims hold below 800,000 as businesses rehire workers amid easing pandemic-induced restrictions, though state-run pandemic assistance claims remain elevated.
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Jobless claims held below 800,000 last week as businesses rehired workers amid easing pandemic-induced restrictions, though the number of Americans claiming state-run pandemic assistance rose. 

The Labor Department reported Thursday that 793,000 Americans filed for first-time jobless benefits in the week ended Feb. 6, down from an upwardly revised 812,000 claims the week earlier. Economists polled by FactSet had expected claims of 757,000.

Continuing claims, which are the number of people not just filing but staying on unemployment benefits, came in at 4.54 million for the week ended Jan. 30, down from the previous week's revised 4.69 million, the Labor Department said.

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

However, more recent liftings of restrictions, including California relaxing its stay-at-home order in late January, allowing restaurants to resume outdoor dining, have prompted businesses to bring people to work, particularly in hospitality.

New York City has said restaurants can begin indoor dining with limited capacity on Friday, while New Jersey’s governor announced this month that restaurants, gyms and nail salons can expand indoor capacity limits.

Even so, the longer-term prospects for the economy and job growth remain opaque - and largely dependent on the path of the coronavirus. Federal Reserve Chairman Jerome Powell on Wednesday painted a grim picture of the U.S. jobs market, saying continued aggressive policy support is needed to help get things back on track.

Addressing the issue will require a “patiently accommodative monetary policy that embraces the lessons of the past” regarding the benefits that low interest rates bring to the labor market, Powell told the Economic Club of New York.

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

On that front, some 8.715 million Americans claimed Pandemic Unemployment Assistance benefits through Jan. 23, while 4.777 million individuals claimed Pandemic Emergency Unemployment Compensation benefits.