By Gwynn Guilford
Workers are slowly pulling away from unemployment assistance as
a U.S. economic revival picks up speed, with initial filings for
benefits holding near pandemic lows and the number of people
receiving help dropping.
Initial jobless claims, a proxy for layoffs, increased by a
seasonally adjusted 16,000 last week to 744,000, the Labor
Department said Thursday. The four-week average, which smooths out
volatility in the figures, rose slightly to 723,750 from 721,250.
Claims are still well above the weekly average of around 220,000 in
the year before Covid-19's arrival.
The continued high rate of filings comes amid other signs of
recent labor-market improvement. U.S. employers added 916,000 jobs
in March, and the unemployment rate slipped to 6.0%, from 6.2% in
the prior month.
Real-time data on job openings indicate a surge in labor demand.
Postings on Indeed, a job-search site, are now 16% above where they
were in February 2020. The pace of growth in job postings has
accelerated in recent weeks and is now higher than during the
summer of 2020 hiring rebound.
Demand for workers in sectors that thrived during the pandemic
is well above precrisis levels. Job postings on Indeed for
manufacturing, loading and stocking positions are now up more than
50% from February 2020, just before the coronavirus was declared a
"If initial claims were to continue to rise from here, that
might cause us to rethink the strength of the labor market
recovery, but we don't expect that to happen," said Nancy Vanden
Houten, lead economist at Oxford Economics, who expects an upward
trajectory for the labor market to continue. The March payroll
report "is a harbinger of things to come as improving health
conditions and the impact of the American Rescue Plan lead to more
widespread reopening of businesses and a hiring boom," she
Sarah House, senior economist at Wells Fargo Securities, pointed
to bureaucratic distortions that have persisted in claims figures
as states work to process historically high numbers of filings for
regular benefits. States also are operating temporary
pandemic-related programs that added millions of people to benefits
rolls and those programs will continue through the summer.
Backlogs and glitches can lead to multiple filings for an
individual and some state systems have struggled with
unemployment-insurance fraud, Ms. House said. She also cited usual
turnover in certain industries in the spring and the Easter
holiday. "These are issues that can mispaint the overall picture.
You really have to look at a more encompassing picture of the labor
market," Ms. House said.
A number of other economic measures signal a U.S. revival is
under way as vaccination rates juice consumer spending, governments
relax restrictions on businesses and households, and federal
stimulus funds flow through the economy.
With nearly one-quarter of U.S. adults now fully vaccinated,
consumers are spending more on gyms, restaurants, hotels and other
services they had shunned over the past year, setting in motion a
post-pandemic spending boom. Consumer spending in March was 24%
higher than in February, according to data from Earnest Research,
which tracks credit- and debit-card purchases.
Moreover, the number of people receiving unemployment assistance
is slowly declining. Continuing claims, which provide an
approximation of the number of people receiving benefits, at the
end of March reached their lowest level of the pandemic, declining
slightly to 3.73 million. A broader reading that includes state and
pandemic-related federal programs also eased slightly to 18.16
Two Men and a Truck, a moving and storage company with more than
350 locations nationwide, is on a push to hire 2,000 workers this
month. But it is struggling to recruit the labor it anticipates
needing for the spring and summer, typically its busiest season,
said Sara Bennett, the company's chief talent officer.
"We're not just seeing the hiring rate decrease -- we're also
seeing the applications decrease," she said. Retaining good
employees has also proved challenging over the past year, she
added, saying the company's staffing woes are in part due to having
to compete with warehousing, delivery and other hot sectors for
"Any employee in those industries is in seriously high demand.
That's made things difficult for us," said Ms. Bennett. "And with
the pandemic -- obviously there's a fear of that that's still out
there, though the vaccines have helped people feel safer and more
The labor market still has a long way to go in healing. As of
March, U.S. payrolls remained 8.4 million below where they stood in
February 2020 before the pandemic hit. More than 4.2 million people
had been unemployed for six months or more, the most since 2013.
And many who have left the unemployment rolls have taken jobs with
lower pay and fewer hours.
Jacob Rheaume, 29 years old, was laid off in October from his
job as an associate attorney at a small corporate law firm in
After collecting unemployment insurance for two months, he
launched a solo practice offering legal services around the
cannabis industry and said he is earning enough to stay afloat. Mr.
Rheaume said he has burned through his entire savings over the past
year covering rent, living expenses and healthcare costs.
"I've been trying to reinsert myself back into the market, but
it's just so saturated with qualified people right now it's really
slim pickings," said Mr. Rheaume, who added that he has noticed
starting law salaries have fallen. "There's sort of a famine
mentality right now -- if you're lucky enough to get a job offer at
a time like this, I think it would be very difficult for people to
Write to Gwynn Guilford at email@example.com
(END) Dow Jones Newswires
April 08, 2021 12:52 ET (16:52 GMT)
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