After a pandemic-driven spike in layoffs amid new restrictions in many states, unemployment claims are falling, helped by a drop in new coronavirus cases.
Initial claims for unemployment insurance declined last week, the Department of Labor reported on Thursday, and were significantly below the level in most of December and early January.
New coronavirus cases have dropped by a third from the level of two weeks ago, which has led states like California and New York to relax restrictions on indoor meals and other activities. This, in turn, provided a kind of respite for workers in the most affected industries.
Last week brought 813,000 new claims for state benefits, compared to 850,000 the previous week. Adjusted for seasonal variations, last week’s figure was 793,000, a decrease of 19,000.
There were 335,000 new applications for Pandemic Unemployment Assistance, a federally funded program for part-time, self-employed and others who are not normally entitled to unemployment benefits. This total, which was not seasonally adjusted, fell from 369,000 in the previous week.
While claims remain extraordinarily high by historical standards, the improvement has raised hopes that layoffs will continue to decline as vaccinations spread and employers change layoffs to hire them.
“We are stuck with a very high level of complaints, but activity is increasing,” said Julia Pollak, a labor economist at ZipRecruiter, an online job market. In fact, job vacancies at ZipRecruiter are at 11.3 million, close to the level of 11.4 million before the pandemic.
The improvement in the pandemic situation has eased pressure on restaurants and bars, Pollak added. But with a deficit of nearly 10 million jobs since the pandemic, and employers still cautious about hiring, the economy faces wide challenges.
Jerome H. Powell, president of the Federal Reserve, told the New York Economic Club on Wednesday that policymakers should focus on restoring full employment, “given the number of people who have lost their jobs and the likelihood that they will lose their jobs. some find it difficult to find work in the post-pandemic economy. “
He noted that employment fell only 4 percent for workers earning high wages, but “an astonishing 17 percent” for the bottom quartile of wage earners.
Many other signs of weakness remain. The Labor Department reported that employers created just 49,000 jobs in January, highlighting the challenges for the unemployed.
President Biden cited poor performance to push for approval of a $ 1.9 trillion pandemic aid package. It would send $ 1,400 to many Americans, provide help to states and cities, and extend unemployment benefits that expire to millions in mid-March.
The House Forms and Resources Committee took an initial step on Wednesday when it started working to promote a measure that would continue with emergency benefits until the end of August and increase a weekly benefit supplement from $ 300 to $ 400 .
With the prospect of additional relief and a reduction in virus cases, some experts say a strong recovery is possible this year. Oxford Economics predicts that the economy will grow 5.9% in 2021, compared to a contraction of 3.5% last year.
Employers are already rolling out the welcome mat in certain fields, according to economists at ZipRecruiter and another major online job site, to be sure.
Pollak said the employer’s posts on ZipRecruiter in the past few days offer hope. “We saw employers exceed all of our expectations and show a lot of exuberance,” she said. “There are clear differences between different industries.”
In addition to the strength in sectors that benefit from the tendency to stay at home, such as storage and deliveries, hiring technology and professional and business services has recently shown signs of life.
“Companies are looking to the future and are somewhat optimistic,” said Pollak.
AnnElizabeth Konkel, an economist at Even Hiring Lab, added that demand for pharmacists increased 23% over the previous year, while driver vacancies increased 18%. “Everything is directly related to the pandemic,” said Konkel.
However, there were regional differences. In cities where many people are working remotely, such as Washington, Seattle, Boston and San Francisco, there have been fewer posts in some fields than in places where more employees are back in the office.
“People are not going to the local cafe on the way to work or stopping at a store to buy something when they work from home,” said Konkel, and it affects hiring.
Restaurant vacancies have declined from the previous year, she added, as have vacancies in arts and entertainment, hospitality and tourism.
At ZipRecruiter, the energy industry increased job vacancies after sharp losses at the start of the pandemic. Manufacturing has also seen more openings recently.
“Some of the losers are finally coming back a little bit,” said Pollak. “But many industries cannot resume while the pandemic is going on.”