Weekly jobless claims fall to pandemic low as labor market continues to heal
The number of Americans applying for unemployment continues to decline each week, a sign layoffs are easing as the U.S. economy rebounds from the devastating impact of the coronavirus pandemic.
Roughly 444,000 workers filed for jobless aid in the week ended May 15, the U.S. Labor Department said Thursday. That's a decrease of 34,000 from the previous week and the lowest level for initial claims since March 14, 2020, when it was 256,000.
Another 95,000 last week filed for Pandemic Unemployment Assistance, a federal program for self-employed and gig workers. Claims remain nearly double the number of weekly aid applications in a typical week before the pandemic.
"After months of stagnation, the visible downward trend of initial claims highlights clear labor market improvement," Indeed Hiring Lab economist AnnElizabeth Konkel said in an email, noting that total initial claims fell below 550,000 for the first time since the pandemic erupted in the U.S. last year.
Jobless claims peaked at more than 6 million in April 2020 as unemployment around the U.S. soared to nearly 15%. Between August and February 2021 the number fell to a range of 700,000 to 900,000, with claims steadily declining in recent months.
Despite disappointing job growth in April, hiring around the U.S. has been strong this year as consumer spending rebounds amid signs the coronavirus is finally receding and repeated rounds of federal fiscal stimulus. The economy grew at a brisk 6.4% annualized rate between January and March.
As of May 1, nearly 16 million people were collecting unemployment, down 887,000 from the previous week, according to High Frequency Economics.
"The message from the data remains one of a gradual decline in layoffs, although the level is still elevated," Rubeela Farooqi, chief U.S. economist at HFE, said in a note to investors. "With reopening ramping up and businesses less constrained by restrictions, filings should ease further as the economy moves closer to normal capacity."
As the economy recovers, a growing number of Republican-led states are pulling the plug on enhanced federal jobless aid for residents. At least 20 states have recently moved to end increased benefits early, with officials arguing it would encourage unemployed people to reenter the labor market and ease worker shortages.
