CHICAGO (NewsNation Now) — The number of Americans applying for unemployment benefits dropped last week to a new pandemic low, a sure sign that the economy is continuing to strengthen.
The Labor Department said Thursday that jobless claims declined 51,000 from the prior week to 364,000. The number of weekly applications for unemployment aid has fallen steadily this year from about 900,000 in January. The level of unemployment claims generally reflects the pace of layoffs.
Claims have dropped from a record 6.149 million in early April 2020, but are still above the 200,000-250,000 range that is viewed as consistent with a healthy labor market.
“New jobless claims, down for the eighth time over the past nine weeks and back below the key 400,000 level, suggest easing stress in the job market,” said Mark Hamrick, senior analyst at Bankrate. “While new claims slipped to a fresh post-pandemic low, the total of nearly 14.7 million individuals receiving some form of unemployment benefit remains historically elevated.”
The rollout of vaccines has sharply reduced new COVID-19 cases, giving consumers the confidence to shop, travel, eat out and attend public events as the economy recovers.
All that pent-up spending has generated such demand for workers, notably at restaurants and tourism businesses, that many employers have been struggling to fill jobs just as the number of posted openings has reached a record high. But many economists expect hiring to catch up with demand in the coming months, especially as federal unemployment aid programs end and more people pursue jobs.
26 states with mostly Republican governors are pulling out of federal government-funded unemployment programs, including a $300 weekly check, which businesses complained were encouraging the jobless to stay at home. The early termination began on June 5 and will run through July 31, when Louisiana, the only one of those states with a Democratic governor, ends the weekly check.
But other factors, too, are believed to have contributed to the shortage of people seeking work again: Difficulty arranging or affording child care, lingering fears of COVID-19, early retirements by older workers, a slowdown in immigration and a decision by some people to seek new careers rather than return to their old jobs.