New jobless claims fell to 498,000 for the week ended May 1st, the lowest number of initial claims since the pandemic hit the economy in March of 2020, data from the Department of Labor showed Thursday.
Economists had expected claims to hold steady with the preliminary estimate of 533,000 in the prior week. The previous week was revised up to 590,000.
Jobless claims can be volatile week to week so economists like to look at the four-week average. This fell to 560,000, falling below 600,000 for the first time since March of 2020.
The progress on jobless claims may hurt the Biden administration’s efforts to pass an infrastructure bill, which it has dubbed the “American Job Plan.” The economy appears to have a jobs plan of its own, undermining claims that trillions more in spending is needed to restore America to full employment.
Continuing claims, which get reported with a week’s lag, declined to 3,690,000, an increase of 37,000 from the previous week’s revised level. The lack of progress on continuing claims provides evidence that enhanced unemployment benefits, which offer an extra $300 per week, are discouraging jobless Americans from seeking jobs.
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 17th—the most recent data available—16,157,024, a decrease of 404,509 from the previous week. Now that we’re past the anniversary of the initial pandemic lockdowns, many of the year-over-year comparisons in economic data show improvement. A year ago, there were more than 17 million claims under all unemployment benefit programs.
Initial claims hit a record 6.87 million for the week of March 27, 2020, more than ten times the previous record. This year has seen immense progress in bringing down the number of new claims, as mass layoffs have been offset by a huge hiring spree.
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