CHICAGO (NewsNation Now) — The number of Americans filing new unemployment claims dropped last week to 547,000, a new low since the pandemic hit and a further encouraging sign that layoffs are slowing on the strength of an improving job market.
It was the second 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.
Weekly jobless claims are down from a peak of 900,000 in early January. At the same time, they’re still more than double the roughly 250,000 level that prevailed before the viral outbreak ripped through the economy.
“At any other time if we had seen you know 500,000 plus people filing for unemployment claims we’d say that’s insane that’s crazy that’s just too huge of a number,” said Emory University finance professor Dr. Tom Smith.
He stressed though that the number is encouraging, but the larger picture still shows concern.
“Our labor force participation rates haven’t increased and so we have to be careful with any kind of long run trend prediction,” stated Smith.
“The total number of individuals receiving some form of unemployment benefit remains historically elevated at 17.4 million. While a number of economic indicators have recently surprised in a positive way, the economy still requires substantial healing,” said Mark Hamrick, Bankrate.com‘s senior economic analyst.
The overall job market is making steady gains. Last month, the nation’s employers adding 916,000 jobs, the most since August, in a sign that a sustained recovery is taking hold. The unemployment rate fell from 6.2% to 6%, less than half the pandemic peak of nearly 15%.
The weekly data on applications for unemployment benefits is generally seen as a rough measure of layoffs because only people who have lost their jobs through no fault of their own are eligible. But during the pandemic, the numbers have become a less reliable barometer.
“I have so many different ads out if I put up 20 different things — I have one person who would show up for me maybe two.. And then maybe one of those people will show up for an interview,” said Deirdre Nestor Corcoran Chicago’s general manager.
The hospitality industry — one of the hardest hit in the pandemic. Now easing back into business.
“I need enough kitchen staff, my food runners, busser, bar tenders servers,” said Nestor. “And now we have to make it as enticing as possible for them to want to come work for us.”
Many states have struggled to clear backlogs of unemployment applications, and suspected fraud has clouded the actual volume of job cuts. In addition, a supplemental $300-a-week federal jobless payment, on top of regular state unemployment aid, might have encouraged more people to apply for benefits.
“There are people who are taking advantage of the system but there’s others who have loved ones, that are higher risk,” said Sous Chef Seth ReHerd.
And the many forced to stay home and provide child care for kids not back in physical school.
“There’s huge differences between the unemployment rates of different genders and different races and so just the smart way to think about it is the economy isn’t treating people the same way,” explained Smith.
For now, the economy is showing signs of recovering. Sales at retail stores and restaurants soared 10% in March — the biggest increase since last May. Federal stimulus checks of $1,400 have been sent to most adults. And Americans who have kept their jobs have accumulated additional savings, part of which they will likely spend now that states and cities have loosened business restrictions and the virus wanes.
The Associated Press and Reuters contributed to this report.