18 March 2021

And Unemployment Goes Up

Initial jobless claims rose by 45,000 to 770,000 last week.

Not good news:

Worker filings for jobless benefits are hovering near the pandemic’s lowest levels, adding to evidence of recent economic improvement.

Jobless claims rose last week to 770,000—still elevated above the pre-pandemic peak of 695,000—but have declined since January. The four-week moving average, which smooths out weekly volatility, fell last week to about 746,000, near November’s pandemic low.

An increase in Texas accounted for about half of last week’s overall rise in jobless claims, which could reflect delayed effects from last month’s winter storm, some economists said.

More broadly, declining jobless claims are one sign of economic improvement. U.S. employers added 379,000 jobs in February, and the unemployment rate ticked down to 6.2%. The U.S. manufacturing industry has exhibited steady signs of expansion. JPMorgan Chase & Co.’s tracker of credit- and debit-card transactions showed consumer spending climbed in early March.

Economists expect widespread distribution of vaccines and a fresh round of government stimulus to fuel growth in the first half of this year.

They are predicting that economic growth this year will be about 6.5% in the US, largely because of government stimulus.

Me, I'll take the under, but the fact that people are lauding fiscal stimulus, as opposed to waiting for monetary stimulus to eventually do its thing, is a nice change in the conventional wisdom.



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