The numbers: New applications for unemployment benefits fell by 18,000 to a two-month low of 215,000 in the last week of February, pointing to a pickup in hiring and declining layoffs as the economy rebounded from an omicron-induced lull.
Initial jobless claims declined from a revised 233,000 in the prior week, the Labor Department said Thursday.
Economists polled by The Wall Street Journal had forecast initial jobless claims to total a seasonally adjusted 225,000 in the seven days ended Feb. 26.
On Wednesday, payroll processor ADP said businesses added 475,000 new jobs in February and a revised 509,000 in January.
The government on Friday is expected to show a similar number of new jobs created in February.
Big picture: The economy appears to have regained some momentum after flagging at the end of 2021. Coronavirus cases have tumbled, governments lifted restrictions and businesses are trying to deliver more goods and services.
The big holdups are lingering shortages of materials and labor. Companies have almost 11 million open jobs — two for every unemployed worker — but not enough people to fill them.
The Russian invasion of Ukraine and prospect of the Federal Reserve raising interest rates are adding to an uncertain outlook in the short run.
Key details: New jobless claims fell the most in Michigan, California, Florida, Illinois and Ohio.
The only state to show a sizable increase was Massachusetts.
New jobless claims appear on track to fall below 200,000 again in the near future. They briefly fell to a 52-year low of 188,000 in early December.
The number of people already collecting unemployment benefits, meanwhile, edged up by 2,000 to 1.48 million in the week ended Feb. 19.
Yet these so-called continuing claims, which are reported with a one-week lag, have returned to pre-crisis levels and are extremely low.
Looking ahead: “We expect initial claims to continue to grind back toward 200,000 as the impact of the omicron variant increasingly fades,” said Nancy Vanden Houten, lead U.S. economist at Oxford Economics.
“Layoffs are expected to be minimal in a tight labor market where employers continue to struggle to attract workers.”
Market reaction: The Dow Jones Industrial Average
DJIA,
+1.79%
and S&P 500
SPX,
+1.86%
were set to open slightly higher in Thursday trades. Stocks rose on Wednesday, but they have been under pressure after the Russian invasion of Ukraine.
