The numbers: Nearly 800,000 people filed for unemployment benefits in early February, indicating that dozens of workers continue to lose their jobs despite the launch of coronavirus vaccines and a decline in Covid-19 cases. Initial jobless claims traditionally filed across states fell by 19,000 to 793,000 in the seven days ending February 6, the government said Thursday. Economists polled by Dow Jones and The Wall Street Journal had predicted that new claims would total 760,000 seasonally adjusted.
However, the decline was basically a mirage. New claims two weeks ago rose to 812,000 from an originally reported 779,000, an unusually large revision that likely reflects ongoing problems in collecting unemployment data. An additional 334,524 applications were submitted through a temporary federal aid program. Adding up the new state and federal claims, the government received 1.15 million applications last week for unemployment benefits, based on actual or unadjusted figures. The combined claims have yet to drop below 1 million a week since last May. Before the pandemic, new claims were at a low of 200,000 and had never increased by more than 695,000 in a week. See: A visual look at how an unfair pandemic has reshaped work and home What happened: New claims for unemployment benefits fell the most in Florida, New York, Kansas, Maryland and Texas. The only states with large increases were Ohio and California. Meanwhile, the number of people already receiving state unemployment benefits fell by 145,000 to 4.5 million seasonally adjusted. That is the lowest level since the pandemic began. However, another 4.77 million who have exhausted state compensation are receiving benefits through an emergency program funded by the federal government. In total, the number of people allegedly receiving benefits from eight separate state and federal programs increased by an unusually large 2.59 million to 20.43 million unadjusted as of January 23. The increase is likely due to states bringing their systems up to date after Washington extended unemployment benefits and made them more generous in late December. Many states have had trouble handling the flood of jobless claims. Less than 2 million people benefited before the pandemic broke out. Note to readers: Unemployment claims have correctly reflected the rise and fall of unemployment during the pandemic, but a government watchdog found that the number of different people applying for or collecting benefits has been inflated by fraud, double counting and other problems. Economists say pay attention to the direction of claims rather than totals. Read: Unemployment compensation claims have been inflated, according to GAO. Many employees of restaurants, hotels, theaters, casinos and the like were laid off in late 2020 after states reimposed some restrictions to stop the spread of the virus. Hiring is likely to accelerate later in the year as more Americans are vaccinated and the economic recovery accelerates, but it could be slow for a few months. The big concern is that many jobs could be lost permanently if companies are unable to resume normal or somewhat normal operations soon. What they are saying “The figures are somewhat misleading and reflect multiple submissions and some degree of fraud,” said Raymond James Chief Economist Scott Brown. “However, these data reflect a continuing high level of job destruction.” “An extraordinarily high number of people remain dependent on government support, indicating ongoing tensions in the labor market,” said Rubeela Farooqi, chief US economist at High Frequency Economics. Market reaction: The Dow Jones Industrial Average DJIA, + 0.20% and S&P 500 SPX, -0.03% were set to open higher in trading on Thursday.