CHICAGO (NewsNation Now) — The number of Americans filing new unemployment claims dropped slightly to 553,000, the lowest level since the pandemic hit last March and another sign the economy is recovering from the coronavirus recession.
It was the third straight week that claims were below the 700,000 level since March 2020 when mandatory shutdowns of nonessential businesses like restaurants and bars were enforced to slow the first wave of COVID-19 infections.
Nearly 3.7 million people were receiving traditional state unemployment benefits the week of April 17. Including federal program designed to ease economic pain from the health crisis, 16.6 million were receiving some type of jobless aid the week of April 10.
Unemployment claims are a proxy for layoffs, and economists have long viewed them as an early indicator of where the job market and the economy are headed. But the figures have become less reliable in recent months as states struggle to clear backlogs of applications and suspected fraud muddies the actual volume of claims.
The U.S.’s economy is rebounding faster than its global rivals, thanks to two additional rounds of COVID-19 relief money from Washington as well as easing anxiety over the pandemic, which has boosted domestic demand and allowed services businesses like restaurants and bars to reopen.
“All of this occurs amid broader improving trends with the economy, and the supply and administration of vaccines in the U.S necessary to foster further progress. A growing number of employers report struggling to find qualified workers, particularly for entry level or lower wage positions,” said Mark Hamrick, senior economic analyst at Bankrate. “The hard-hit leisure and hospitality sector, including bars and restaurants, appears to be ground zero for this challenge. Firms of all kinds are hustling to meet surging demand while facing higher prices and supply bottlenecks.”
Employers added an impressive 916,000 jobs in March. The unemployment rate has dropped to 6% from a peak of 14.8% in April 2020.
The economy continued to power ahead early in the second quarter, with consumer spending vaulting to a 14-month high in April, thanks to the fiscal stimulus and the expansion of the COVID-19 vaccination program to all American adults. Americans have accumulated at least $2 trillion in excess savings.
Many economists expect the economy will fully recover from the recession in late 2023. They forecast growth this year could top 7%, which would be the fastest since 1984. The economy contracted 3.5% in 2020, the worst performance in 74 years.
The Associated Press and Reuters contributed to this report.