Unemployment claims rise for the first time in a month

First-time unemployment claims rose last week

The number of Americans applying for jobless aid rose last week, reversing several weeks of steady declines.

Roughly 861,000 people filed for first-time unemployment aid in the week ended February 13, an increase of 13,000 from the previous week, the Labor Department said Thursday. Another 516,000 people applied for Pandemic Unemployment Assistance, up 174,000 from the week before.

Initial estimates for previous weeks were revised upward to show that more people had filed for jobless benefits than previously thought.

"Overall, the level remains elevated and an extraordinarily high number of people remain on government support," Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said in a note. 

Altogether, 18.3 million people, or about 1 in 9 workers, were receiving jobless aid as of the end of January. Before the pandemic, weekly unemployment claims hovered around 250,000, never rising above 700,000 even in the depths of the Great Recession.

The new figures underscore that the job market has stalled, with employers having added a mere 49,000 jobs in January after cutting workers in December. Nearly 10 million jobs remain lost to the pandemic. Though the unemployment rate fell last month from 6.7%, to 6.3%, it did so in part because some people stopped looking for jobs. People who aren't actively seeking work aren't counted as unemployed.

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Economists think jobless applications may rise in the coming weeks because of ice storms that have caused business shutdowns across the country. 

"We expect to see a sustainable downward trend emerge over the next couple months as the economy gradually reopens, but claims likely will be temporarily boosted by the extraordinarily severe weather across much of the country this week," economists at Pantheon Macroeconomics said in a note.

Two federal unemployment aid programs — one that provides up to an extra 24 weeks of support and another that covers self-employed and gig workers, dubbed Pandemic Unemployment Assistance — are set to expire in about a month. President Joe Biden is proposing to extend both programs through August as part of his $1.9 trillion package now before Congress.

The Associated Press contributed reporting.

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