Unemployment Claims Drop to New Pandemic Low
The number of people initiating claims for unemployment benefits dropped to a new pandemic-era low for the second straight week, boosting hopes that more people are finding and keeping jobs as the economy recovers.
In the week through April 17, there were 547,000 initial claims for unemployment insurance, 39,000 fewer than the previous week and the lowest since 256,000 people filed on March 14, 2020, the last week before pandemic lockdowns took hold, according to data released Thursday by the Department of Labor. The drop was a surprise to economists, who had forecast the volume of claims to rise to 641,808, according to a median estimate cited by Moody’s Analytics.
“Claims are on a clear downward path," said Nancy Vanden Houten, lead economist at Oxford Economics, a U.K.-based research firm.
Initial jobless claims have at times seemed disconnected from the broader economic recovery, with numbers remaining stubbornly high despite increasingly optimistic forecasts for economic growth this year. While the weekly figures are still more than twice where they were before the pandemic began, they were running at three-to-four times pre-pandemic levels for most of the last year.
Now below 600,000 for two straight weeks, the weekly data is a sign that fewer people are being laid off and employers are hiring, said Vanden Houten. Hiring accelerated in March, with the U.S. economy adding 916,000 jobs, the most in seven months. In all, there were 144.1 million people on nonfarm payrolls in March, 8.4 million fewer than there were in February 2020, before the COVID-19 outbreak, but about 14 million more than at the height of the economic crush.
Oxford forecasts another 6 million jobs will be added by the end of 2021. After that, it expects the pace of recovery to slow as anxieties about contracting COVID-19, child care, and other issues stemming from the pandemic delay some people from rejoining the workforce, Vanden Houten said.
“It’s going to be a gradual recovery, but we’re going in the right direction,” she said.