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Applications for U.S. state unemployment benefits fell by more than forecast last week to the lowest since November, signaling that job cuts are starting to ebb as COVID-19 infections decline and vaccinations accelerate.
Initial jobless claims in regular state programs decreased by 111,000 to 730,000 in the week ended Feb. 20, Labor Department data showed Feb. 25. The prior week’s figures were revised down. On an unadjusted basis, claims fell by 131,734 to 710,313. Economists in a Bloomberg survey estimated 825,000 initial claims.
Continuing claims — an approximation of the number of people filing for ongoing state benefits — declined by 101,000 to 4.42 million in the week ended Feb. 13.
The figures, while still higher than claims data during the darkest days of the last recession, indicate that pandemic job cuts may be starting to slow. Employment is expected to improve meaningfully as more Americans get vaccinated.
“Continued progress in many industries has been tempered by significant losses in industries such as leisure and hospitality, where the resurgence in the virus and increased social distancing have weighed further on activity,” Federal Reserve Chair Jerome Powell said in a speech Feb. 23.
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