Jobless Claims Reach Unexpected 744,000, Far Worse Than Originally Predicted

According to the Department of Labor on Thursday, new weekly jobless claims have jumped to 744,000 for the week ending on April 3rd.

Previously, economists had predicted jobless claims might decline to 680,000 from 721,250 the previous week.

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An ‘Unexpected’ Rise In Jobless Claims

Jobless claims have increased for two weeks in a row now, when they were expected to decrease.

Yahoo Finance reported on Thursday, “New weekly jobless claims data have generally been following a downtrend over the course of 2021, though they still remain elevated relative to historical trends.”

“At 744,000, initial jobless claims remained well above the high of 665,000 new claims filed at the worst point of the Great Recession in March 2009,” the outlet noted.

The report also observed, “And the data continue to be choppy, with each of the last two weeks’ worth of new claims unexpectedly rising off a pandemic-era low.”

The Wall Street Journal Reports That Better Labor News Is On The Way

Despite the unexpected rise in jobless claims, the Wall Street Journal on Thursday reported that there were reasons for optimism as the country seems to be turning a corner on the COVID-19 pandemic due to widespread vaccine distribution.

“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,” the Journal reported.

WSJ continued, “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,” the Journal noted. “Claims are still well above the weekly average of around 220,000 in the year before Covid-19’s arrival.”

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Another bright spot according to the Journal was, “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.”

A significant factor in March is likely that was a period when many states began loosening restrictions on businesses, particularly restaurants and bars.

To date, forty-three states are now mostly open, which obviously has also meant increased economic activity.