CHICAGO (NewsNation Now) — The number of Americans filing first-time applications for unemployment benefits unexpectedly rose last week to 861,000.
The U.S. Labor Department released its latest figures Thursday, showing that last week’s jobless claims increased by 13,000 from the week prior. It comes as the economy remains under pressure from the coronavirus pandemic despite a decline in new infections and more businesses reopening.
Before the virus erupted in the United States last March, weekly applications for unemployment benefits had never topped 700,000, even during the Great Recession of 2008-2009.
Part of the increase in claims could be related to the temporary closure of automobile plants beginning last week due to a global semiconductor chip shortage. General Motors announced it would take down production entirely at its Fairfax plant in Kansas City during the week of Feb. 8.
Ford Motor has reduced shifts at its Dearborn truck plant and Kansas City assembly plant.
Meanwhile, the number of Americans receiving traditional unemployment benefits dipped slightly in the week ending Feb. 6, the latest period for which figures are available. More than 4.49 million people received unemployment benefits that week, a drop of roughly 64,000 from the week before.
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 — were extended until March 14 by a $900 billion rescue package that was enacted late last year.
President Joe Biden is proposing to extend both programs through August as part of his $1.9 trillion package now before Congress. The legislation would also provide an additional $400 a week in federal jobless aid, on top of state benefits. That money would replace a $300-a-week benefit that was included in the relief package approved last year.
Some industry data suggests that hiring remains weak. UKG, a company that provides time management software, estimates that among its mostly small-business clients, the number of shifts worked nationally has risen just 0.2% in the past month. That tepid increase signals that hiring has been sluggish so far this month.
Still, the economy has shown signs of picking up as states and cities have eased some business restrictions and the most recent round of $600 stimulus checks have made their way through the economy. Sales at retail stores and restaurants soared in January, jumping 5.3% from December, the government said Wednesday.
Furniture and electronic and appliance stores recorded some of the strongest increases, likely a result of last year’s healthy gain in home sales.
Factory output also rose last month, the Federal Reserve said Wednesday, its fourth straight increase, led by greater production of steel and other metals.
“We may be eventually on the verge of a kind of shoulder, or transition, season for the economy in the coming months as the pandemic eases, more vaccines are administered, and consumers increase spending followed by a pick-up in hiring,” said Mark Hamrick, Bankrate‘s senior economic analyst. “The possibility becomes more probable when and if further economic relief legislation is approved, following up on the better-than-expected January retail sales figures spurred in part by $600 stimulus payments.”
The Associated Press and Reuters contributed to this report. Reporting by AP’s Christopher Rugaber and Reuters’ Lucia Mutikani.