Dramatic Drop in Unemployment Claims Sets New Pandemic Low
The number of people initiating claims for unemployment benefits dropped to its lowest level since the start of the pandemic, signaling the job market recovery may finally be catching up to the rest of the economy.
In the week ending April 10, there were 576,000 initial claims for unemployment insurance, a decrease of 193,000 from the previous week’s revised total, according to data released Thursday by the Department of Labor. It was the largest one-week drop in claims since August, and brings the number below 600,000 for the first time since before the pandemic. Economists had expected a less dramatic drop, with a forecast of 686,100 claims, according to a median estimate of economists cited by Moody’s Analytics.
Initial claims had been stuck around 700,000—about three times pre-pandemic levels—for weeks, and had fallen below that level only one other time during the course of the pandemic.
Thursday’s data gives some hope that the labor market may be heating up, with plentiful government stimulus money flowing through the economy, more and more people receiving vaccines, and anxieties about the pandemic easing. The U.S. economy added the most jobs in seven months in March, and economists expect hard-hit service businesses to continue adding jobs as restrictions relax and more people venture out.
Weekly initial claims still remain more than twice as high as they were before the pandemic, though, and risks—like new virus strains lengthening the pandemic—could hinder the job market’s recovery, Moody’s Analytics senior director Ryan Sweet said.