According to the latest report from the U.S. Department of Labor, the recovery of the U.S. jobs market has hit a bump. The Federal Reserve, however, still maintains an optimistic outlook for economic recovery as the pandemic slowly winds down.
The Department of Labor's report, released on Thursday, found that first time unemployment for the month of March was 744,000, coming in tens of thousands of claims ahead of the predicted 694,000. While the figure is a mammoth improvement over last March's peak of just under 7 million claims, it does send a bit of a mixed signal on the economy.
Many experts aren't panicking, seeing the movement as something to be expected as the economy recovers.
"Jobless claims may bounce around week to week as the recovery takes hold, but we expect they will start to decline more consistently as the economy gains momentum," Nancy Vanden Houten of Oxford Economics told International Business Times.
One factor that some are speculating caused the bump in jobless claims is overworked state/federal agencies attempting to catch up with outstanding backlogs of claims. Another related cause may be that, because many programs are set to expire or have already have, many unemployed Americans may be submitting new claims in large volumes, further adding to the backlog of claims to process.
According to the Federal Reserve, recovery is still a bit of a ways off, but the economic outlook is brightening. The economy managed to add 916,000 jobs in March, helping to alleviate the higher-than-expected unemployment figure. In all, about 9 million fewer workers are still unemployed compared to pre-pandemic figures.
Wall Street didn't seem too bothered by the news, given that major stock indices were up for the week when markets closed on Friday. The Dow Jones Industrial Average (NYSE: DIA) was up 1.6% for the week, while the Nasdaq Composite (NASDAQ: QQQ) was up 2.2%.