A year after jobless claims first rocketed upward, they may finally be returning to earth.
Last week, the Labor Department reported that initial applications for unemployment benefits had fallen to their lowest levels of the pandemic. Economists cautioned against reading too much into the drop because the weekly data has been plagued by measurement issues and other quirks throughout the pandemic.
The latest data, being released on Thursday, could show whether the drop was more than a fluke. If claims don’t rebound much — or decline further — it would suggest that workers’ prospects are finally improving as the vaccine rollout accelerates and more states lift restrictions on business activity.
“We could actually finally see the jobless claims numbers come down because there’s enough job creation to offset the layoffs,” said Julia Pollak, a labor economist at the job site ZipRecruiter.
But Ms. Pollak cautioned that benefits applications would not return to normal overnight. Even as many companies resume normal operations, others are discovering that the pandemic has permanently disrupted their business model.
“There are still a lot of business closures and a lot of layoffs that have yet to happen,” she said. “The repercussions of this pandemic are still rippling through this economy.”
The European Central Bank’s chief economist argued on Thursday that fears of a big rise in inflation are overblown, a sign that the people who control interest rates in the eurozone are likely to keep them very low for some time to come.
The comments — by Philip Lane, an influential member of the central bank’s Governing Council whose job includes briefing other members on the economic outlook — are an attempt to calm bond investors who are nervous that the end of the pandemic will lead to high inflation.
Fueling their fears, inflation in the eurozone rose to an annual rate of 1.3 percent in March from 0.9 percent in February, according to official data released on Wednesday, the fastest increase in prices in more than a year.
Market-based interest rates have been rising because investors worry that President Biden’s $2 trillion stimulus program will provoke a broad increase in prices for years to come. The interest rates that prevail on bond markets ripple through the financial system and can make mortgages and other types of borrowing more expensive, creating a drag on economic growth.
Despite big monthly swings in inflation during the last year, the average had been…
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