Unemployment claims in the United States drop from 24,000 to 400,000 as the economy recovers

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WASHINGTON (AP) The number of Americans receiving unemployment benefits fell last week, another sign the labor market continues to recover quickly from the coronavirus recession.

Unemployment claims fell from 24,000 to 400,000 last week, the Labor Department reported Thursday.

Weekly requests have declined more or less steadily this year, from a peak of 904,000 in early January. But they remain high by historic standards: Before COVID hit the United States in March 2020, claims were hitting around 220,000 per week.

The job market and the economy in general are recovering from the collapse of spring 2020. The vaccine rollout this year has encouraged businesses to reopen or extend their hours of operation and have sent consumers locked away visiting restaurants, bars and shops.

The health crisis is still not over. COVID-19 cases are increasing as the highly contagious delta variant spreads among the unvaccinated. The United States reports an average of more than 50,000 new cases per day, compared to less than 12,000 per day at the end of June. The increase in cases could have economic consequences if governments decide to restrict business activity again or if consumers choose to stay at home as a precaution.

For now, however, the economy is so strong that many companies say they cannot find workers. Employers posted a record 9.2 million job postings in May, posting jobs faster than applicants can fill them.

In response to complaints about a labor shortage, 22 states decided to end federal employment benefits of $ 300 per week intended to cushion the economic fallout from the pandemic. Twenty states have dropped two other federal programs – one of which offers benefits to self-employed and gig workers and another that serves those who have been unemployed for six months or more. Expanded programs are expected to expire nationwide on September 6.

Overall, 13.2 million people were receiving some form of unemployment assistance the week of July 10, up from 31.9 million a year ago.

Beyond the weekly highs and lows, the trend in total number of deposits is expected to remain downward over the next few weeks, wrote Rubeela Farooqi, chief US economist at High Frequency Economics, in a research report. . Overall, job growth is expected to accelerate, and labor shortages are expected to ease as concerns about the virus of short-term stress, childcare issues and improved unemployment benefits are declining. But the increase in virus cases could be a headwind for the job market and the economy.

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