Will the unemployment claims report offer new hope on the economy?

The latest update on the labor market is scheduled to arrive Thursday morning when the government releases its weekly report on jobless claims.The unexpectedly sharp drop announced last Thursday took Wall Street by surprise and fueled hopes that the economic recovery was gaining momentum. About 613,000, it was the lowest weekly total of initial claims for state unemployment benefits since the pandemic began, though still high by historical standards.This time, analysts surveyed by Bloomberg expect the figure to climb. Even so, most forecasters maintain that the labor market is improving.“We know from experience that weekly claims bounce around from one week to the next,” said Gregory Daco, chief U.S. economist at Oxford Economics, and reports from states like California tended to spike and drop. What matters is the longer-term trend, he said, and since January, there has been consistent progress.Warmer weather, more extensive coronavirus vaccination efforts and a stream of government assistance that has enabled consumer spending have all contributed to recent gains.Still, the labor market remains encumbered by anxiety about coronavirus infections and the demands of child care when regular school schedules have been disrupted.According to the Census Bureau’s weekly Household Pulse Survey, more than four million people who were unemployed in March said they were not working because they were afraid of catching Covid-19.“It’s important to keep in mind that the trend is going in the right direction,” said Heidi Shierholz, director of policy at the left-leaning Economic Policy Institute, “but we’re still at crisis levels of unemployment claims.”


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