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Jobs Report March 2021: Gain of 916,000 as Recovery Sped Up

But retailers, manufacturers and transportation companies added jobs as well, which Ms. Swonk said showed that the recovery was being driven by more than just the reopening of shuttered businesses. Government aid has given Americans money to spend, and the confidence to spend it.

Businesses, too, appear to be growing more confident. Many of the jobs added in January and February were temporary positions, but in March, temporary staffing levels were essentially flat, indicating companies were filling permanent positions instead.

Amy Glaser, senior vice president at the staffing firm Adecco, said that in recent weeks, a growing share of her clients had been looking for permanent employees, or converting temporary hires into permanent ones.

“Our conversations have really shifted even over the last six weeks,” she said. “We spent the last year doing a lot of worst-case-scenario planning with our clients, and now the conversation is the opposite: How do we capture the rebound to make the most effective use of it?”

When Main Event Entertainment, which runs 44 family entertainment centers in 17 states, began reopening its doors in June, business was initially slow. But in recent weeks, customers have begun to come back in greater numbers.

“It’s been a very slow, gradual improvement, and then during spring break it was a step up,” said Chris Morris, the company’s chief executive officer. “We believe there is pent-up demand. There have been a lot of missed birthday parties.”

In response, Main Event is going on a hiring spree. The company is aiming to increase its staff by about 20 percent, adding roughly 1,000 positions.

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Unemployment Claims Up a Bit; Manufacturing Gains

A year after they first rocketed upward, jobless claims may finally be returning to earth.

More than 714,000 people filed for state unemployment benefits last week, the Labor Department said Thursday. That was up slightly from the week before, but still among the lowest weekly totals since the pandemic began.

In addition, 237,000 people filed for Pandemic Unemployment Assistance, a federal program that covers people who don’t qualify for state benefits programs. That number, too, has been falling.

Jobless claims remain high by historical standards, and are far above the norm before the pandemic, when around 200,000 people a week were filing for benefits. Applications have improved only gradually — even after the recent declines, the weekly figure is modestly below where it was last fall. Some 18 million people in total are receiving jobless assistance, many of them through programs that extend benefits beyond the 26 weeks that are offered in most states.

But economists are optimistic that further improvement is ahead as the vaccine rollout accelerates and more states lift restrictions on business activity. Fewer companies are laying off workers, and hiring has picked up, meaning that people who lose their jobs are more likely to find new ones quickly.

manufacturing index, a closely watched measure of the industrial economy, hit its highest level since 1983 in March. The report’s employment index also rose strongly, a sign that manufacturers are likely to step up hiring to meet rising demand.

Economists will get a more complete, albeit less timely, picture of the job market on Friday, when the Labor Department releases data on hiring and unemployment in March. Forecasters surveyed by FactSet expect the report to show that U.S. employers added more than 600,000 jobs last month, the most since October.

Even better numbers probably lie ahead. The March data was collected early in the month, before most states broadened vaccine access and before most Americans began receiving $1,400 checks from the federal government as part of the newly passed relief package. Those forces should lead to even faster job growth in April, said Jay Bryson, chief economist for Wells Fargo.

“If you don’t get a barnburner in March, I think you’re probably going to get one in April,” he said.

Virus cases are rising again in much of the country as states have begun easing restrictions. If that upward trend turns into a full-blown new wave of infections, it could force some states to reverse course, which could act as a brake on the recovery, Mr. Bryson warned.

But few economists expect a repeat of last winter, when a jump in Covid-19 cases pushed the recovery into reverse. More than a quarter of U.S. adults have received at least one dose of a coronavirus vaccine, and more than two million people a day are being inoculated. That should allow economic activity to continue to rebound.

Still, Ms. Pollak cautioned that the job market would not return to normal overnight. Even as many companies resume normal operations, others are discovering that the pandemic has permanently disrupted their business model.

“There are still a lot of business closures and a lot of layoffs that have yet to happen,” she said. “The repercussions of this pandemic are still rippling through this economy.”

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Unemployment Claims Are Lowest Since Pandemic Began

The Fed changed its policy framework last year to focus on “shortfalls” from full employment, rather than “deviations.” In practice, that means it does not plan to raise interest rates just because the labor market heats up — for instance, if unemployment drops below historically normal levels — so long as inflation is under control.

“The more vibrant the labor market is, the more likely it is to be an inclusive, vibrant labor market,” Charles Evans, president of the Federal Reserve Bank of Chicago, said on a call with reporters Thursday. “We’re not going to prematurely cut off a vibrant labor market.”

Frequently Asked Questions About the New Stimulus Package

The stimulus payments would be $1,400 for most recipients. Those who are eligible would also receive an identical payment for each of their children. To qualify for the full $1,400, a single person would need an adjusted gross income of $75,000 or below. For heads of household, adjusted gross income would need to be $112,500 or below, and for married couples filing jointly that number would need to be $150,000 or below. To be eligible for a payment, a person must have a Social Security number. Read more.

Buying insurance through the government program known as COBRA would temporarily become a lot cheaper. COBRA, for the Consolidated Omnibus Budget Reconciliation Act, generally lets someone who loses a job buy coverage via the former employer. But it’s expensive: Under normal circumstances, a person may have to pay at least 102 percent of the cost of the premium. Under the relief bill, the government would pay the entire COBRA premium from April 1 through Sept. 30. A person who qualified for new, employer-based health insurance someplace else before Sept. 30 would lose eligibility for the no-cost coverage. And someone who left a job voluntarily would not be eligible, either. Read more

This credit, which helps working families offset the cost of care for children under 13 and other dependents, would be significantly expanded for a single year. More people would be eligible, and many recipients would get a bigger break. The bill would also make the credit fully refundable, which means you could collect the money as a refund even if your tax bill was zero. “That will be helpful to people at the lower end” of the income scale, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting. Read more.

There would be a big one for people who already have debt. You wouldn’t have to pay income taxes on forgiven debt if you qualify for loan forgiveness or cancellation — for example, if you’ve been in an income-driven repayment plan for the requisite number of years, if your school defrauded you or if Congress or the president wipes away $10,000 of debt for large numbers of people. This would be the case for debt forgiven between Jan. 1, 2021, and the end of 2025. Read more.

The bill would provide billions of dollars in rental and utility assistance to people who are struggling and in danger of being evicted from their homes. About $27 billion would go toward emergency rental assistance. The vast majority of it would replenish the so-called Coronavirus Relief Fund, created by the CARES Act and distributed through state, local and tribal governments, according to the National Low Income Housing Coalition. That’s on top of the $25 billion in assistance provided by the relief package passed in December. To receive financial assistance — which could be used for rent, utilities and other housing expenses — households would have to meet several conditions. Household income could not exceed 80 percent of the area median income, at least one household member must be at risk of homelessness or housing instability, and individuals would have to qualify for unemployment benefits or have experienced financial hardship (directly or indirectly) because of the pandemic. Assistance could be provided for up to 18 months, according to the National Low Income Housing Coalition. Lower-income families that have been unemployed for three months or more would be given priority for assistance. Read more.

There have been false starts before, namely a burst of growth that faded as the virus worsened in the fall, but last week’s drop in claims was still notable for its size. In February, the economy remained more than nine million jobs short of where it was before the pandemic.

Unemployment claims have been at historically high levels for the past year, partly because some workers have been laid off more than once. Still, the bottom line is that the data recently has been favorable, said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

“Weekly numbers have been choppy but we’ve been on a downward trend since mid-January,” he said. “As more business owners see a reopening will come, they are more willing to hang on to staff.”

Between the state and federal programs, the number of new jobless claims last week was just under 900,000 after being stuck for months above one million a week.

There were 242,000 new claims for Pandemic Unemployment Assistance, a federal program covering freelancers, part-timers and others who do not routinely qualify for state benefits, a decrease of 43,000.

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Unemployment claims drop to a pandemic low as reopenings offer hope.

While vaccination efforts have gathered speed and restrictions on activities have receded in many states, the job market is showing signs of life.

Initial claims for state unemployment benefits fell last week to 657,000, a decrease of 100,000 from the previous week, the Labor Department reported Thursday. It was the lowest weekly level of initial state claims since the pandemic upended the economy a year ago.

On a seasonally adjusted basis, new state claims totaled 684,000.

In addition, there were 242,000 new claims for Pandemic Unemployment Assistance, a federal program covering freelancers, part-timers and others who do not routinely qualify for state benefits, a decrease of 43,000.

Unemployment claims have been at historically high levels for the past year, partly because some workers have been laid off more than once. Much of the drop last week was accounted for by a decline in new claims in Ohio and Illinois, but economists said the overall trend was encouraging.

$1.9 trillion relief package this month, has lifted economists’ expectations for growth, the labor market has lagged behind other measures of recovery.

Still, the easing of restrictions on indoor dining areas, health clubs, movie theaters and other gathering places offers hope for the millions of workers who were let go in the last 12 months. And the $1,400 checks going to most Americans as part of the relief bill should help spending perk up in the weeks ahead.

Diane Swonk, chief economist at the accounting firm Grant Thornton, said she hoped for consistent employment gains but her optimism was tempered by concern about the longer-term displacement of workers by the pandemic.

“The numbers are encouraging, but no one is jumping the gun and hiring up for what looks to be a boom this spring and summer,” she said. “There is a reluctance to get ahead of activity.”

“We’ve passed the point where you can just flip a switch and the lights come back on,” she added. “We need to see a sustained increase in hiring, which I think we will see, but the concern is that it won’t be so robust. It takes longer to ramp up than it does to shut down.”

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Why Are Jobless Claims Still High? For Some, It’s the Multiple Layoffs.

Jobs are coming back. Businesses are reopening. But a year after the pandemic jolted the economy, applications for unemployment benefits remain stubbornly, shockingly high — higher on a weekly basis than at any point in any previous recession, by some measures.

And headway has stalled: Initial weekly claims under regular and emergency programs, combined, have been stuck at just above one million since last fall, and last week was no exception, the Labor Department reported Thursday.

“It goes up a little bit, it goes down, but really we haven’t seen much progress,” said AnnElizabeth Konkel, an economist for the career site Indeed. “A year into this, I’m starting to wonder, what is it going to take to fix the magnitude problem? How is this going to actually end?”

The continued high rate of unemployment applications has been something of a mystery for many economists. With the pandemic still suppressing activity in many sectors, it makes sense that joblessness would remain high. But businesses are reopening in much of the country, and trends on employment and spending are generally improving. So shouldn’t unemployment filings be falling?

report released Thursday by the California Policy Lab, a research organization affiliated with the University of California, nearly 80 percent of the unemployment applications filed in the state last month were from people who had been laid off earlier in the pandemic, gotten back to work, and then been laid off again.

Such repeat claims were particularly common in the information sector — which in California includes many film and television employees who have been sidelined by the pandemic — and in the hard-hit hotel and restaurant industries, as well as in construction.

The Policy Lab researchers had access to detailed information from the state that allowed them to track individual workers through the system, something not possible with federal data.

California’s economy differs from that of the rest of the country in myriad ways, and the pandemic has played out differently there than in many other places. But if the same patterns hold elsewhere, it suggests that the ups and downs of the pandemic — lockdowns and reopenings, restrictions that tighten and ease as virus cases rise and fall — have left many workers stuck in a sort of limbo.

A restaurant may recall some workers when indoor dining is allowed, only to lay them off again a few weeks later when restrictions are reimposed. A worker may find a temporary job at a warehouse, or pick up a few hours of work on a delivery app, but be unable to find a more stable job.

disproportionately includes Black workers. The record-keeping for that program has been plagued by overcounting and fraudulent claims. But even a look at the state’s regular unemployment insurance program, which hasn’t faced the same issues, reveals remarkable numbers: Close to three in 10 California workers have claimed benefits during the crisis, and more than four in 10 Black workers.

aid package signed by President Biden last week ensures that those programs will continue until fall, but benefits alone won’t prevent the damage that prolonged joblessness can do to workers’ careers and mental and physical health.

“The recovery needs to be on the scale of being a once-in-a-generation economic upswing to really pull those people back into the labor market,” Ms. Konkel said.

The latest data provides little sign of that happening. More than 746,000 people filed first-time applications for state unemployment benefits last week, up 24,000 from the previous week, according to the Labor Department. In addition, 282,000 filed for Pandemic Unemployment Assistance.

Most forecasters expect the labor market recovery to accelerate in coming months, as warmer weather and rising vaccination rates allow more businesses to reopen, and as the new injection of government aid encourages Americans to go out and spend. Policymakers at the Federal Reserve said on Wednesday that they expected the unemployment rate to fall to 4.5 percent by the end of the year, a significant upgrade over the 5 percent they forecast three months ago.

“We’re already starting to see improvement now, and I think that will start to accelerate fairly quickly,” said Daniel Zhao, an economist at the career site Glassdoor.

But government aid can do only so much as long as the pandemic continues to limit consumers’ behavior. The pace of the recovery now, Mr. Zhao said, depends on a factor beyond the scope of normal economic analysis.

“The dominating factor right now is how quickly we can get vaccines in arms,” he said.

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Unemployment Claims Fall, Fueling Economic Hope

The second year of the coronavirus pandemic is starting with rising hopes for the economic outlook — and a long way to go.

Positive signs are emerging as restrictions on businesses lift and the pace of vaccine distributions ramps up. But millions remain unemployed, and many economists are cautioning that a return to pre-pandemic conditions could take months, if not years.

That reality became all the more evident on Thursday, when the Labor Department reported that a total of 709,000 workers filed first-time claims for state unemployment benefits in the week that ended March 6. Though the figure was 47,000 lower than the week before — and touching the lowest levels of the last year — it was still extraordinarily high by historical standards.

“The story week in and week out is that magnitude steals the show,” said AnnElizabeth Konkel, an economist at the career site Indeed. The report “really paints the picture of long-term joblessness,” she said, adding, “That is the reality for millions of Americans and is going to be a hurdle for the recovery to clear.”

final approval to President Biden’s $1.9 trillion relief package, which will inject the economy with a fresh surge of federal aid. The legislation, signed by Mr. Biden on Thursday, includes an extension of federal jobless benefits, which could provide a stopgap measure of relief for those still out of work as the labor market begins to heal in earnest after months of uneven improvement.

employers added 379,000 jobs in February, an unexpectedly robust number that reinforced confidence in the strength of the economic recovery roughly one year into the pandemic-induced downturn. The gains came largely in the hard-hit leisure and hospitality industries.

“The pieces are falling into place for a more substantial improvement in the labor market,” said Sarah House, a senior economist at Wells Fargo.

As vaccination rates climb, the weather warms up and additional government help arrives, many economists foresee a more positive trajectory.

“We’re seeing a huge pickup in hiring,” said Julia Pollak, a labor economist with the employment site ZipRecruiter. “I think for many employers, it’s becoming real, and for many job seekers it is as well.”

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Biden Presses Economic Aid Plan, Rejecting Inflation Fears

As investors look for a pickup in growth and slightly faster price increases, watchers of the Federal Reserve have begun to expect that it might begin to slow its big bond purchases, which it has been using to bolster growth, and raise interest rates sooner than had been anticipated.

The central bank has promised to leave interest rates near zero until the economy has achieved full employment and inflation is above 2 percent and expected to stay there for some time. If markets expect the economy to reach those goals sooner rather than later, that could be seen as an expression of optimism.

“If you look at why they’re moving up, it’s to do with expectations of a return to more normal levels, more mandate-consistent levels of inflation, higher growth, an opening economy,” Jerome H. Powell, the Fed chair, said of rates during a recent congressional testimony.

But markets are forward-looking: The economy has a long way to go before it will be back to full strength. Administration officials have vowed not to be distracted by improvements in high-profile numbers, like overall job growth, and instead keep pouring fuel on the recovery until historically disadvantaged groups have regained jobs, income and the benefits of other measures of economic progress.

Job gains last month came in above economists’ forecasts, but it would take more than two years of hiring at the current level to return the labor market to its employment level in early 2020.

In addition, while all demographic groups continue to feel economic pain, the fallout has not been evenly spread. Employment for Black workers remains nearly 8 percent below its prepandemic level, while employment for white workers is down about 5 percent. Black workers tend to lose jobs heavily during recessions, then gain them back only after a long stretch of job growth.

Ms. Jones, the labor department economist, said the administration was determined to accelerate the recovery for marginalized workers, noting that Black workers, in particular, took years longer to recover from the 2008 financial crisis — a delay that left lasting scars on those households.

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