Unemployment claims in the United States continue to create new pandemic lows
Numbers: Unemployment claims in the United States continued to fall to pandemic lows in mid-May, as companies ramp up recruitment efforts.
Initial jobless claims fell from 34,000 to 444,000 in the week ended May 15. This is the lowest level of requests since March 2020.
Economists polled by Dow Jones and the Wall Street Journal had predicted that new claims would fall to 452,000 seasonally adjusted.
While new compensation claims from jobless states have been cut in half since the start of the year, they are still more than twice as high today compared to the month before the pandemic.
The number of apps was running in the low 200,000 before the viral outbreak early last year.
What happened: Regular claims for unemployment benefits are on the decline in all states. The same goes for applications filed under a federal emergency program put in place during the pandemic.
Lily: A polarized employment report: the main suspects of weak recruitment gains in April
Only 95,086 claims for unemployment benefits were filed last week under the federal relief program. They peaked last year at over a million a week.
The number of people already receiving state unemployment benefits, known as continuing claims, increased by 111,000 to seasonally adjusted 3.75 million in the week ended May 8.
Lily: Record number of small businesses fail to find enough workers
Some 5.1 million people who exhausted state allowances were also receiving benefits through a federally funded emergency program.
In total, the number of people receiving benefits from eight separate state and federal programs stood at 16 million as of May 1. These requests had exceeded 30 million at the start of the crisis.
Less than 2 million people were receiving benefits before the pandemic broke out.
Note to readers: A government review found that the number of separate people receiving benefits had been inflated by fraud and double counting. Widespread fraud has also resulted in tens of billions of dollars in irregular payments, a review of the estimated work department.
Big picture: Layoffs and new jobless claims are declining, but a big debate has erupted over whether extra unemployment benefits are preventing some unemployed people from taking a job.
The debate intensified after a disappointing jobs report in April. Since then, nearly 20 states have said they plan to stop offering a weekly federal benefit of $ 300 in June to push people back into the workforce, a move that could affect several million people.
Either way, a fast growing economy supported by federal stimulus, low interest rates and high savings is expected to remain strong through the summer. This will likely result in many more hires and new jobs that add to the economic dynamic.
What the economists say? “Continuing claims have flattened out a bit in recent weeks, but we expect they will continue to decline, reflecting a lower level of initial claims, rehired workers and some people depleting regular benefits,” said Nancy Vanden Houten, economist at Oxford Economics.
Market reaction: The Dow Jones Industrial Average DJIA,
and S&P 500 SPX,
rose on Thursday in a bid to end a three-day losing streak. Analysts said the stronger data was boosting the market.