US unemployment claims fell sharply last week

However, the latest figures came as storms disrupted business in parts of the country and at least one state appeared to adjust to filing fraud attempts, factors that could have hindered the totals.

Complaints dropped significantly in Ohio last week, after a large increase earlier this month, which state officials said was likely to be an attempted fraud. And storms and cold temperatures in Texas and elsewhere have caused widespread power outages and outages.

The recent data is largely consistent with a job market that was almost neutral this winter, while other economic readings pointed to a recovery.

Unemployment claims are closely watched by policymakers and investors about the direction of the labor market and the economy in general, but the winter storms that hit Texas and elsewhere can affect short-term layoff trends. Storms can create temporary unemployment for some workers and may have hampered people’s compensation and state government prosecutions.

“With severe weather events, we typically see a short-term increase in layoffs that corrects in a few weeks,” said Dave Gilbertson, vice president of Ultimate Kronos Group, a workplace software company. “However, at a time when the economy is already struggling to accelerate, these temporary layoffs can delay the recovery in a devastating way.”

UKG data showed that the number of shifts worked by employees in the U.S. fell last week, led by a 58.5% decline in Mississippi and almost 50% in Texas and Louisiana.

Employers created just 49,000 net jobs in January, after cutting 227,000 jobs in December, the Department of Labor said. These monthly readings marked a significant slowdown in hiring, compared to last summer, when part of the economy reopened as state restrictions eased. By January, the economy had recovered just over half of all jobs lost last spring.

There are signs this year that economic activity is about to increase as Covid-19’s cases decline, more people are vaccinated, more government stimulus reaches families and businesses and states lift restrictions.

The number of open positions at the end of January exceeded the levels of the previous year, according to the job search site Even.com. Aided by a new round of stimulus, retail spending accelerated in January. The Commerce Department is scheduled to release family income and family spending in January on Friday, which show that both increased during the month.

Economists project faster economic and job growth later this year, with respondents to The Wall Street Journal predicting that employers will add 4.8 million jobs in 2021.

“We know that really fast job growth is coming as soon as some of these sectors – hospitality, entertainment and travel – can get back up and running,” said Andy Challenger, senior vice president at the replacement company Challenger, Gray & Christmas. “But now we are in the doldrums of that recovery.”

The winter weather has probably caused some temporary layoffs between construction companies and small businesses in recent weeks, Challenger said. Among the larger entities that your company tracks, job-cut ads are well below the start of the pandemic, but are becoming more comprehensive and include airlines, food manufacturers, government agencies and media companies.

A recent extension of improved unemployment benefits and temporary easing of job search requirements may also be distorting recent claims data.

Late last year, Congress and then President Donald Trump approved a $ 300 increase in unemployment benefits on top of regular state benefits, which paid an average of $ 319.02 a week last year, from according to the Department of Labor. President Biden earlier this year issued a separate executive action clarifying that workers who refuse a job for security reasons, including possible exposure to Covid-19, can still remain on unemployment insurance.

The combination of higher pay and smoother application of job search requirements could encourage more workers to apply for benefits, in some cases, instead of looking for jobs.

In addition to regular state benefits, the Department of Labor reports the number of people enrolled in two special pandemic programs: one for self-employed and temporary workers and another for those who have exhausted other forms of benefits. The total number of lawsuits in progress for these two programs was almost 12 million at the end of January. This is more than double the estimated number that receives ongoing benefits through regular state programs, which cover most American workers.

Margaret Grosso, 75, has been unemployed for more than a year and receives an increase in unemployment insurance. She is looking for a receptionist and office jobs, including in hospitals near her home in northern New Jersey. She said she received two doses of the Covid-19 vaccine and is looking forward to returning to work to supplement her Social Security benefits.

“I go to interviews – and I’m grateful for even getting it – but they keep telling me that I’m overqualified,” she said. Ms. Grosso worked as an office administrator, account executive and previously as a model in the fashion industry. “I feel like it’s an age thing – it’s very difficult and discouraging.”

—Sarah Chaney Cambon contributed to this article.

Write to Eric Morath at [email protected]