The number of U.S. citizens filing new claims for unemployment benefits unexpectedly increased last week,
Preliminary claims for unemployment benefits rose 23,000 to 248,000 for the week ended Feb. 12, the Labor Department said on Thursday. Economists surveyed by Reuters had forecast 219,000 applications for the most recent week.
Unemployment claims have been declining since hitting a three-month high in mid-January as the Covid-19 pandemic spread across the country. The United States reports an average of 145,769 new COVID-19 infections a day, down from 700,00 readings in mid-January.
So far there is a shortage of nearly 10.9 million employees. Economist Veronica Clark noted that some turmoil in the labor market in the near term could be for the better or vice versa. It is therefore not surprising that unemployment claims will fall further.
The economy created 467,000 jobs in January. The shrinking labor market has driven strong wage growth, which has contributed to high inflation.
The minutes of the Federal Reserve meeting on Jan. 25-26 published on Wednesday showed most policymakers at the U.S. Central Bank saw labor market conditions already reaching standards or very close to full workforce.
The Fed is expected to start raising interest rates in March as a measure to ease inflation.
