By Eric Morath
Filings for initial unemployment claims have held at a high
level since the start of the year and could for a few weeks be
affected by job disruptions from severe winter storms across the
country.
Economists project initial jobless claims to regular state
programs, a proxy for layoffs, to hold nearly steady for the week
ended Feb. 20, according to a Wall Street Journal survey. The Labor
Department will publish the latest data at 8:30 a.m. ET
Thursday.
The four-week moving average, which smooths out week-to-week
fluctuations, was 833,000 in the week ended Feb. 13, within the
roughly 750,000 to 850,000 range that has held since last October
and above the pre-pandemic peak.
The recent data is broadly consistent with a labor market that
has been stuck near neutral this winter, while other readings of
the economy have pointed to a pickup.
Jobless claims are closely watched by policy makers and
investors about the direction of the jobs market and overall
economy, but winter storms that hit Texas and elsewhere could
affect layoff trends in the short term. The storms, which caused
widespread power outages and disruptions, could create temporary
unemployment for some workers and may have made it difficult for
people to file claims and for state governments to process
them.
"With severe weather events, we typically see a short-term
uptick in layoffs that corrects itself within a few weeks," said
Dave Gilbertson, vice president of Ultimate Kronos Group, a
workplace software firm. "However, during a time when the economy
is already struggling to accelerate, these temporary layoffs can
delay the recovery in a devastating way."
UKG data showed the number of shifts worked by employees across
the U.S. fell last week, led by a 58.5% decline in Mississippi and
nearly 50% declines in Texas and Louisiana.
Employers added only a net 49,000 jobs in January after cutting
227,000 jobs in December, the Labor Department said. Those monthly
readings marked a significant slowdown in hiring, compared with
last summer, when part of the economy reopened as state
restrictions eased. Through January, the economy had recovered a
little more than half of all jobs lost last spring.
There are signs this year that economic activity is poised to
pick up as Covid-19 cases fall, more people become vaccinated, more
government stimulus reaches households, and businesses and states
lift restrictions.
The number of job openings at the end of January exceeded
year-earlier levels, according to job search site Indeed.com. Aided
by a fresh round of stimulus, retail spending accelerated in
January. The Commerce Department on Friday is scheduled to release
January household income and spending figures that show both rose
during the month.
Economists project faster economic and job growth later this
year, with those surveyed by The Wall Street Journal projecting
employers to add 4.8 million jobs in 2021.
"We know really fast job growth is coming as soon as some of
these industries -- hospitality, entertainment and travel -- can
get going again," said Andy Challenger, senior vice president at
outplacement firm Challenger, Gray & Christmas. "But right now
we're in the doldrums of this recovery."
Winter weather likely caused some temporary layoffs among
construction firms and small businesses in recent weeks, Mr.
Challenger said. Among the larger entities that his company tracks,
job-cut announcements are well down from earlier in the pandemic
but are becoming more broad-based and include airlines, food
manufacturers, government agencies and media companies.
A recent extension of enhanced unemployment benefits and the
temporary easing of job-search requirements could also be skewing
recent claims data.
At the end of last year, Congress and then-President Donald
Trump approved a $300 enhancement to unemployment benefits on top
of regular state benefits, which paid an average of $319.02 a week
last year, according to the Labor Department. President Biden
earlier this year separately issued an executive action clarifying
that workers who decline a job out of safety concerns, including
possible Covid-19 exposure, can still remain on unemployment
insurance.
The combination of the larger payments and more lenient
enforcement of jobs-search requirements could encourage more
workers to apply for benefits, in some cases instead of seeking
jobs.
States also have seen a high number of fraudulent claims. Ohio
this month reported a jump of more than 100,000 additional claims
that the state said was likely attempted fraud.
In addition to regular state benefits, the Labor Department
reports the number of people enrolled in two special pandemic
programs: one for self-employed and gig workers, and another for
those who exhausted other forms of the benefits. The total number
of ongoing claims filed for those two programs was nearly 12
million at the end of January. That is more than double the
estimated number receiving ongoing benefits through regular state
programs, which covers most U.S. workers.
Margaret Grosso, 75 years old, has been out of work for more
than a year and has been receiving extended unemployment benefits.
She is seeking receptionist and clerical jobs, including at
hospitals near her home in northern New Jersey. She has received
two doses of Covid-19 vaccine and said she is eager to return to
work to supplement her Social Security benefits.
"I go on interviews -- and I'm thankful I even get those -- but
they keep telling me I'm overqualified," she said. Ms. Grosso
worked as an office administrator, account executive and previously
as a model in the fashion industry. "I sense it's an age thing --
it's just very difficult and discouraging."
Sarah Chaney Cambon contributed to this article.
Write to Eric Morath at eric.morath@wsj.com
(END) Dow Jones Newswires
February 25, 2021 05:44 ET (10:44 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.