US jobless claims drop to 360,000, a new pandemic low

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Washington (AFP) – The number of Americans filing for unemployment benefits has reached its lowest level since the pandemic struck last year, further evidence that the US economy and labor market are rapidly recovering from the pandemic recession.

Thursday’s report from the Labor Department showed that unemployment claims fell by 26,000 last week to 360,000. The weekly count, a proxy for layoffs, has been steadily declining somewhat since it topped 900,000 in early January.

The US recovery from the recession is going so fast that many forecasters have forecast that the economy will expand this year by about 7%. This would be the strongest calendar year growth since 1984.

The rollout of COVID-19 vaccines has led to a sharp drop in new viral cases — from a seven-day average of about 250,000 in early January to nearly 25,000 recently — despite a recent increase. As the health crisis recedes, trapped Americans are increasingly getting out of their homes, excited to spend on things they missed during pandemic lockdowns – dinners out, a round of drinks and sports and leisure events, vacations and shopping trips.

In response, companies scrambled to meet the unexpected surge in customer demand: They posted jobs — a record 9.2 million in May — faster than they could fill them. Labor shortages in many industries cause employers to raise wages and, in some cases, prices to offset higher labor costs.

A variety of factors hinder the provision of potential appointments. Many Americans still have health concerns about working with large numbers of people. Many people, mostly women, are no longer working or looking for work because they have to take care of children when schools and day care centers close. Nearly 2.6 million older workers have taken advantage of expanded stock portfolios and home values ​​to retire early.

The temporary federal unemployment benefit of $300 per week, in addition to the state’s regular unemployment assistance, may enable some people to be more selective in finding and obtaining jobs. Nearly half of the states plan to stop paying the supplement by the end of July in what proponents say is an effort to get more unemployed people to look for jobs.

Last month, employers added 850,000 jobs, hourly wages rose 3.6% from a year ago — faster than the annual pace before the pandemic and evidence that companies are forced to pay more to attract and retain workers. However, the US is still about 6.8 million fewer jobs than it was in February 2020, before the virus broke out across the country and paralyzed the economy.

Weekly claims for unemployment benefits remain high by historical standards: Just before the pandemic, they were running at about 220,000 a week. Finally, 13.8 million Americans received some type of unemployment assistance during the week of June 26, down from 30.6 million a year earlier.

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