On Thursday, the US Jobless Aid Department released data showing that applications for unemployment benefits rose unexpectedly last week, marking the largest increase in five months. This could be a sign that the job market recovery may be losing some momentum as the COVID-19 pandemic continues to affect businesses and the economy.
Here are 2 Best Points for US Jobless Aid: The Applications Rise to the Max in 5 Months;
What the reports suggest?
According to the report, jobless claims rose by 45,000 to a seasonally adjusted 770,000 for the week ending March 6. This is the first increase in claims in four weeks and the highest level since late January. Economists had predicted that claims would drop to 700,000.
The increase in claims was driven by a surge in applications in California, where the state’s unemployment agency processed a backlog of claims that had built up over the past few weeks due to technical issues in US Jobless Aid.
However, even after adjusting for the backlog, claims still rose by 9,000 in California and by 1,300 in New York, another state that has been hit hard by the pandemic.
The increase in jobless claims is a reminder that the labor market recovery remains fragile, despite the recent signs of improvement. While hiring has picked up in recent months, the pace of US Jobless Aid gains has been slower than expected, and there are still more than 9 million fewer jobs than there were before the pandemic.
“The labor market remains on the ropes,” said Mark Hamrick, senior economic analyst at Bankrate.com. “We are still a long way from getting back to pre-pandemic employment levels.”
The recent increase in jobless claims could also be a sign that businesses are still struggling to adjust to the new economic reality created by the pandemic. Many companies have been forced to cut jobs or reduce hours due to lower demand and the need to implement social distancing measures.
The increase in claims comes as Congress debates a new round of stimulus measures aimed at supporting businesses and individuals affected by the pandemic. The $1.9 trillion stimulus package passed by the House of US Jobless Aid last week includes provisions for extended unemployment benefits, direct payments to individuals, and aid to state and local governments.
What would help boost the market?
Some economists say that the stimulus package could help to boost the job market recovery and support businesses that are still struggling to stay afloat.
“The stimulus package could be a game-changer for the economy,” said Julia Coronado, founder of economic research firm Macro Policy Perspectives in US Jobless Aid. “It could help to keep businesses open and workers employed, which could ultimately lead to a faster and stronger recovery.”
However, others caution that the stimulus package alone may not be enough to solve all of the problems facing the economy, and that more targeted policies may be needed to address specific issues such as the long-term unemployment that many workers are facing.
“Stimulus is important, but it’s not a panacea,” said Hamrick. “We need to be thinking about longer-term strategies for rebuilding the economy and creating good jobs for workers.”