New weekly jobless claims unexpectedly held above 700,000 last week to extend a rise from late March, despite other signs that rehiring has been taking place across the recovering economy.
The Department of Labor released its weekly report on new jobless claims on Thursday at 8:30 a.m. ET. Here were the main metrics from the report, compared to consensus data compiled by Bloomberg:
Initial jobless claims, week ended April 3: 744,000 vs. 680,000 expected and a revised 728,000 during the prior week
Continuing claims, week ended March 27: 3.734 million vs. 3.638 million expected and a revised 3.750 million during the prior week
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. 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.
But overall, the latest claims data "have been improving lately, with a downward trend reported since early in January that generally has coincided with vaccine distribution and a reduction in new COVID-19 cases," JPMorgan economist Bruce Kasman wrote in a recent note. "Initial claims did jump in the latest weekly report, but the four-week moving average for regular state filings hit its lowest level in over a year."
A spate of better-than-expected labor market data corroborated these trends. The March jobs report showed a staggering 916,000 payrolls were brought back, and employment indexes in the Institute for Supply Management's (ISM) manufacturing and services indexes each advanced last month. Job openings reached a two-year high in February.
Individual companies have also announced a pick-up in rehiring to keep pace with rising consumer demand, with Southwest (LUV) and other air carriers announcing plans to recall hundreds of pilots who had been on extended leave during the pandemic. These signs of an impending travel surge also bode well for other services industries, which had been hit hard by anemic demand over the past year.
Still, a persistently massive number of Americans remain out of work, based on the number of claimants across all programs. As of the week ended March 20, 18.2 million individuals were still claiming unemployment benefits of some form. That included more than 13 million Americans on the federal Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation program, the latter of which offers extended benefits to those who have exhausted their regular state insurance.
Some of the most populous U.S. states contributed heavily to the increase in new jobless claims last week. California's new claims increased by nearly 39,000 on an unadjusted basis to reach more than 145,000, New York's initial claims rose by nearly 16,000 to about 67,000.
Other states reported notable decreases in new claims. Alabama and Ohio each posted drops in unadjusted new claims of more than 10,000, though these and other drops were not enough to offset increases elsewhere.
For the week ended March 20, Puerto Rico, the Virgin Islands, Nevada, Alaska and Pennsylvania comprised the areas with the greatest insured unemployment rates – or ratios of those claiming unemployment benefits to the total sizes of states' labor forces. Puerto Rico's insured unemployment rate totaled 6.0%, while the insured unemployment rate in the Virgin Islands was 5.6%. Nevada had an insured jobless rate of 5.3%, while Alaska's and Pennsylvania's rates each came in at 5%. This compared to a national insured unemployment rate of 2.9%.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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