CHICAGO (NewsNation Now) — The number of Americans filing new unemployment claims dropped last week to 547,000, a new low since the pandemic hit and a further encouraging sign that layoffs are slowing on the strength of an improving job market.
It was the second straight week that claims were below the 700,000 level since March 2020 when mandatory shutdowns of nonessential businesses like restaurants and bars were enforced to slow the first wave of COVID-19 infections.
Weekly jobless claims are down from a peak of 900,000 in early January. At the same time, they’re still more than double the roughly 250,000 level that prevailed before the viral outbreak ripped through the economy.
“This is precisely the kind of surprise we like to see, unlike the drumbeat of negative shocks that we experienced a year ago at this time,” said Mark Hamrick, Bankrate.com‘s senior economic analyst. “The total number of individuals receiving some form of unemployment benefit remains historically elevated at 17.4 million. While a number of economic indicators have recently surprised in a positive way, the economy still requires substantial healing.”
The overall job market is making steady gains. Last month, the nation’s employers adding 916,000 jobs, the most since August, in a sign that a sustained recovery is taking hold. The unemployment rate fell from 6.2% to 6%, less than half the pandemic peak of nearly 15%.
The weekly data on applications for unemployment benefits is generally seen as a rough measure of layoffs because only people who have lost their jobs through no fault of their own are eligible. But during the pandemic, the numbers have become a less reliable barometer.
Many states have struggled to clear backlogs of unemployment applications, and suspected fraud has clouded the actual volume of job cuts. In addition, a supplemental $300-a-week federal jobless payment, on top of regular state unemployment aid, might have encouraged more people to apply for benefits.
For now, the economy is showing signs of recovering. Sales at retail stores and restaurants soared 10% in March — the biggest increase since last May. Federal stimulus checks of $1,400 have been sent to most adults. And Americans who have kept their jobs have accumulated additional savings, part of which they will likely spend now that states and cities have loosened business restrictions and the virus wanes.
The Associated Press and Reuters contributed to this report.