U.S. Unemployment Claims Fell to 498,000 Last Week
By Gwynn Guilford
Weekly unemployment claims fell to 498,000 last week -- a new
low since the Covid-19 pandemic began more than a year ago -- in a
fresh sign that the labor-market rebound is gathering force.
Worker filings for jobless claims, a proxy for layoffs, fell
92,000 last week from 590,000 the prior week. That brings the
four-week average of initial claims, which smooths out volatility
in weekly data, to the lowest point since the pandemic took hold,
though still well above pre-pandemic levels.
"Overall it looks like we're seeing healing in the jobs market,"
Beth Ann Bovino, U.S. chief economist for S&P Global Ratings,
said ahead of the report.
"That's much better than just over a year ago, but that's still
double what there was pre-crisis," she said. "It would be
[considered] bad in a normal recession, let's just put it that
With more than two-fifths of U.S. adults now fully vaccinated,
Americans are spending on restaurant meals, travel and other
services that they had shunned over the past year due to fear of
Covid-19 and business restrictions. At the same time, government
stimulus is boosting economic activity more generally.
Economists are closely watching unemployment-claims numbers for
signs that companies are holding on to workers as businesses
scramble to keep up with the upswing in demand.
This improvement will likely be captured in the Labor
Department's April employment report, which the department will
release Friday. Economists forecast that the U.S. economy added one
million jobs last month, compared with a gain of 916,000 in March,
and project that the jobless rate ticked down to 5.8% from 6% a
However, the pandemic's impact was so severe that economists
expect employment to close out this year 1.6% lower than in the
fourth quarter of 2019, despite the swift pace of hiring they
anticipate in coming months. The number of new jobless claims
peaked at more than six million in the spring of 2020. After
falling sharply, it then plateaued between 700,000 and 900,000
throughout the fall and winter.
The decline in claims over the past few weeks is "definitely a
positive sign that there are not as many layoffs happening," said
Citigroup economist Veronica Clark. "It's a good sign that a return
of activity levels is creating a more normal labor market."
Other signs also indicate that demand for workers is growing. A
number of big employers, including Amazon.com Inc., have recently
announced increases in pay.
At the end of April, job postings on Indeed, a job-search site,
were 24% above where they were in February 2020, ahead of when the
pandemic took hold in the U.S., after adjusting for seasonal
variation. Ads for jobs in retail, cleaning and sanitation,
hospitality and tourism, and restaurants have surged in the past
few weeks as businesses reopen and activity revs up.
While the number of new applications has been declining, the
level of Americans receiving unemployment benefits remains
elevated. About 16.2 million workers were receiving benefits in the
week ended April 17 via one of several programs, including regular
state aid and federal emergency programs put in place in response
to the pandemic. While that figure, which isn't adjusted for
seasonality, has come down in recent weeks, it was still nearly
eight times the number of people collecting benefits before the
A coronavirus relief package passed in March expanded
eligibility for extended unemployment benefits until early
September and continued a $300-a-week supplement to the amount
authorized by states. While unemployment benefits typically expire
after six months or less, federal extensions enacted during the
pandemic will allow some people to receive payments for about 18
Some economists say the extended and enhanced benefits are
discouraging workers from returning to work, especially those
earning lower wages. Others say the payments have provided income
support to those who can't return to work because of a lack of
child care, fears of contracting the virus or a lack of the skills
to shift into working in fast-growing sectors such as logistics or
Despite the building economic momentum, Ms. Clark said it might
not be until September, when extended unemployment benefits end and
schools are set to resume in person, that many workers are drawn
back into the labor force full-time.
Write to Gwynn Guilford at firstname.lastname@example.org
(END) Dow Jones Newswires
May 06, 2021 09:00 ET (13:00 GMT)
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