The Labor Department reported that applications for jobless claims increased by 21,000 to a seasonally adjusted 2203,000 for the week that ended on March 4, 2021.
While economists had expected claims for the week to be around 195,000, Chris Rupkey, chief economist at MUFG, indicated that "companies are clearly intent on hanging on to their workers for dear life.
" Furthermore, the four-week moving average of claims, which smooths out some of the weekly fluctuations, climbed 4,000 to 197,000, remaining below the 200,000 barrier for the seventh week.
The rising number of claims, although the highest in five months, is still lower than pre-pandemic levels when they came in at about 220,000 a week.
Various news sources suggest that this increase in jobless claims may be due to the pandemic-relief bill that President Joe Biden recently signed into law, which is providing a $300 weekly supplement to jobless benefits.
This temporary increase might be enticing more people to seek unemployment benefits, even if they do not entirely qualify for it.
Although the rising number of jobless claims could be concerning, it appears that the labour market remains resilient.
Julia Pollak, a labor economist at ZipRecruiter, said, "Businesses in most parts of the country are continuing to add jobs at a brisk pace, driven by rising demand and swelling order books."
Moreover, economists suggest that Biden's $1.9tn pandemic-relief bill, with its $1,400 payments to many individuals, could further spur the economy, especially when combined with the rapid rollout of Covid-19 vaccines.
The balance between stimulating the recovery through the stimulus payment and avoiding inflation through the inevitable government borrowing and spending is key.
Therefore, the director of National Economic Council, Brian Deese, said on CNBC's Squawk Box, "We're not just throwing money in the economy blindly, but we're investing in the infrastructure, investing in our kids, investing in vaccines to make sure that we come through this as strong as possible."