“Applications for U.S. state unemployment benefits fell last week by more than forecast, a third straight decline that signals job cuts are starting to slow as Covid-19 infections ebb,” Bloomberg writes.
Numbers To Consider.
- Those filing for initial unemployment claims in regular state programs decreased by 33,000 to 779,000 for the week ending Jan. 30. It was 816,247 on an unadjusted basis.
- Continuing claims, which counts those filing for multiple weeks, dropped to 4.59 million last week.
- Economists surveyed by Bloomberg projected 830,000 initial claims and 4.7 million continuing claims.
What It Means: The figures are still elevated, so no cause for celebration there yet. But what we’re starting to see are “layoffs related to the pandemic are starting to ebb after jobless claims picked up in December and early January.”
- As more Americans get vaccinated and virus trends decrease, economic activity is expected to pick up, which could see job cuts slow down.
- States are already reducing restrictions. New York is bringing back indoor dining, and California lifted its stay-at-home order.
The Takeaway: Now, all eyes shift to Friday’s monthly jobs report. Forecasts say the labor market added around 100,000 jobs in January versus a reduction of 140,000 in December.
- The coming results could play a significant role in how quickly President Joe Biden’s $1.9 trillion stimulus plan comes down the pipe. The bill text has yet to be drafted, but it includes an “extension of expiring federal unemployment programs through September and an increase of supplemental benefits from $300 to $400 per week.”