New applications for jobless benefits in the US jumped last week, reversing most of the improvement in the prior week when the total dipped below 700,000 for the first time since the pandemic shuttered the US economy.
First-time claims spiked 61,000 to 719,000 in the week ended March 27, from 658,000 a week earlier, the Labor Department reported on Thursday.
The result contradicted recent upbeat reports of job gains as businesses reopen and vaccination efforts accelerate, and confounded economists' predictions of a modest decline in the total.
And the weekly data show more than 237,000 people sought benefits under the special pandemic aid program for freelance and gig workers.
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The report was released the day after President Joe Biden unveiled a $2 trillion infrastructure plan he said will create millions of new jobs and help the US economy recovery from the scaring inflicted by COVID-19.
Treasury Secretary Janet Yellen said Thursday the plan "begins to fix the structural problems that have plagued our economy for the past four decades," and will make the US economy "far more competitive on the world stage."
The Labor Department figures show 18.2 million people continued to receive some form of unemployment aid through the week ended March 13, the vast majority through temporary pandemic benefits.
"This is a bit disappointing, given the sharp drop in Google searches for 'file for unemployment' last week," said Ian Shepherdson of Pantheon Macroeconomics.
However, taking the past two weeks together "it's clear that the trend in claims is falling. We expect a sustained sharp decline in the second quarter as the economy reopens," he said in an analysis.
Despite the spike in jobless claims, economists are expecting a blowout in employment gains and a drop in the unemployment rate for March in the all-important monthly report due out Friday.
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