America’s Reopening: Jobless Claims Unexpectedly Drop to 547,000

New weekly jobless claims dropped to 547,000 for the week that ended April 17, the Department of Labor said Thursday.

That is the lowest level of claims since the pandemic struck last year. Economists had expected claims to rise to 615,000 from the preliminary estimate of 576,000 in the prior week. The previous week was revised up by 10,000 to 586,000.

Jobless claims can be volatile week to week so economists like to look at the four-week average. This fell to 651,000, a decline of 27,750 from the previous week.

Continuing claims, which get reported with a week’s lag, declined to 3,674,000, a decrease of 34,000 from the previous week’s revised level.

Including new programs for gig workers and small business owners, the total number of continued claims for benefits in all programs for the week ending April 3rd—the most recent data available—was 17,405,094, an increase of  491,674 from the previous week. A year ago, there were 12,492,421 weekly claims filed in all programs.

Claims hit a record 6.87 million for the week of March 27, 2020, more than ten times the previous record. Through spring and early summer, each subsequent week had seen claims decline. But in late July, the labor market appeared to stall and claims hovered around one million throughout August, a level so high it was never recorded before the pandemic struck.

In recent weeks, claims have been particularly volatile. They jumped much higher than expected in early March and then fell much lower than expected in the following week.

Many states eased or eliminated restrictions on businesses, including restaurants and bars, in March. Forty-three states are now mostly open. This has led to a surge of economic activity. As well, the American Rescue Act authorized $1.9 trillion of stimulus money, although only a small fraction of that has been spent so far.