The number of people initiating claims for unemployment benefits continued to inch toward pre-pandemic levels, dropping below 500,000 for the first time since last March.
In the week ending May 1, there were 498,000 initial claims for unemployment insurance, 92,000 fewer than the previous week’s revised total, according to seasonally adjusted data released Thursday by the Department of Labor. The number beat economists’ expectations, with 538,578 claims forecasted by a median estimate from Moody’s Analytics. It is the third time in four weeks claims have dropped to a pandemic-era low, according to DOL’s revised numbers.
Initial claims are still about twice the level from March 14, 2020 (when they were 256,000), just before the economy locked down. But they have fallen by 244,000 in the last four weeks alone. The positive trend for initial claims gives credence to the growing optimism around the jobs market, which had lagged behind other aspects of the economic recovery.
Hiring also has picked up in the new year, with larger than expected totals in February and March. Economists believe those numbers will be the precursor to an extended hiring spree in 2021, with some projecting the April jobs report, scheduled to be released by the Bureau of Labor Statistics Friday, will show the economy added at least 1 million jobs in April.
“Claims have declined by 33% since the start of April, further confirmation that a recovery in the labor market is well underway,” wrote Nancy Vanden Houten, lead economist at U.K.-based research firm Oxford Economics, in a commentary. “We expect more evidence of that recovery in tomorrow’s April jobs report.”
Oxford projects a more modest gain of 775,000 jobs in April.