Unemployment records fell again last week as the improving public health situation and the easing of pandemic-related restrictions allowed the labor market to continue its gradual return to normal.
About 505,000 people were filing applications for state unemployment benefits for the first time, the Labor Department said Thursday, down more than 100,000 from a week earlier. In addition, 101,000 people applied for Pandemic Unemployment Assistance, a federal program for freelancers, self-employed and other people who are not entitled to regular benefits. None of the figures are seasonally adjusted.
Claims for unemployment benefits remain high by historical standards, but have fallen significantly in recent weeks after progress stalled in the fall and winter. Weekly claims for government benefits, which peaked at more than six million last spring, fell below 700,000 for the first time at the end of March and have now been below that level for four consecutive weeks.
“In the past few weeks, claims data has improved dramatically, and I think this suggests that the labor market recovery accelerated in April,” said Daniel Zhao, chief economist at Glassdoor (not ZipRecruiter as reported earlier here) has been).
By mid-April, more than nine million people were still receiving unemployment insurance through government programs – or emergency programs to extend government benefits – the latest available data. That amount, which does not include workers on pandemic unemployment benefits, has declined in recent weeks, but at a slower pace than new claims. At the height of the crisis last spring, more than 20 million people were receiving benefits.
Economists should get a clearer picture of progress in the labor market on Friday when the Labor Department releases data on recruitment and unemployment in April. The report is expected to show employers created about a million jobs in the last month, up from 916,000 in March. The leisure and hospitality industry, which was hardest hit by the early stages of the pandemic last spring, has spearheaded the recovery in recent months, a trend that forecasters believe continued into April.
Even last month’s strong job growth will still weigh on the U.S. economy with millions fewer jobs than it did before the pandemic. Forecasters expect the report to show the unemployment rate fell below 6 percent in April, compared to nearly 15 percent last spring. However, this does not take into account people – especially women – who have left the workforce, including those who look after children while schools are closed. If these people had been counted as unemployed, the unemployment rate would have been above 9 percent in March and most likely near that level in April.
Many employers have said in the last few weeks that they want to hire even faster but are having difficulties finding enough workers. Some have blamed increased unemployment benefits for preventing people from returning to work. On Tuesday, Montana Governor Greg Gianforte said his state would be pulling out of a federal program that provides improved benefits to unemployed workers and instead pay recipients a $ 1,200 bonus when they find new jobs.
Economic research has shown that unemployment benefits can reduce the intensity of job search for workers. However, most studies find that the overall labor market impact is small, especially when unemployment is high. And Mr. Zhao and other economists say there are other reasons why labor supply is recovering more slowly than demand. Many potential employees are juggling childcare or other chores at home. others remain cautious about the health risks of returning to personal work.
“I think we will see that the labor supply will improve quite dramatically in the coming months as the pandemic subsides,” Zhao said.