An update on labor market health is due Thursday morning when the Department of Labor is due to release its weekly report on government unemployment insurance claims.
Although new unemployment claims are not nearly as high as last spring, they are still extraordinarily high by historical standards. At this point in time there are around 10 million fewer jobs than in the previous year.
Wall Street analysts interviewed by Bloomberg expect a decrease in initial weekly government unemployment benefits.
The number of coronavirus cases has fallen as attempts have been made to provide vaccines to those most at risk. But until employers and consumers feel that the pandemic is under control, the labor market will not fully recover, according to economists.
“Until people feel that this is going to happen and that another big wave is not coming, I can’t imagine unemployment benefits going to change much for a while,” said Allison Schrager, an economist at the Manhattan Institute.
Federal Reserve and Treasury Department executives said the damage to the labor market was much lower than shown in published government figures, and estimated the actual unemployment rate to be closer to 10 percent than the 6.3 percent most recorded by the Labor Department frequently cited measure.
Jerome H. Powell, chairman of the Federal Reserve, testified in front of Congress this week: “The economic recovery remains mixed and far from complete, and the path ahead is highly uncertain.”
The service industries are hardest hit, particularly in the restaurants, hospitality, leisure and travel sectors. On the career side, in fact, overall job postings are 5 percent higher than a year ago, with the demand for warehouse and construction workers and drivers being greatest, said AnnElizabeth Konkel, an economist at the company.
“We need job postings to stay above the prepandemic baseline and get people back into the job market,” she said.