Just two weeks ago, initial jobless claims fell to 658,000, the lowest level since the pandemic hit U.S. shores. But since then, the data trend has reversed.
“Unemployment claims may rebound week over week as the recovery sets in, but we expect they will start to decline more steadily as the economy gains momentum,” wrote Nancy Vanden Houten, Senior Economist at Oxford Economics, in a note to clients.
She expects a hiring boom in the spring and summer as other businesses reopen completely.
In addition to regular state claims, 151,752 people applied for benefits under the Pandemic Unemployment Assistance Program, designed to help self-employed and on-demand workers.
Together, nearly 893,000 people applied for benefits last week (this figure is not seasonally adjusted).
AnnElizabeth Konkel, an economist at the Indeed Hiring Lab, said it was good news that the drop came from fewer workers needing benefits under the PUA program.
“While the initial claims have to fall much further to get back to ‘normal’ levels, even from a distance, at least there is movement in the right direction,” she said in a note.
Continuous unemployment claims, which count claims that have been filed for at least two consecutive weeks, stood at 3.7 million on a seasonally adjusted basis during the week ended March 27. This was only slightly down from the week before, and like the first-time claims figure, it was higher than economists had predicted.