As regular readers know, progress on weekly unemployment claims has been hit or miss in the early months of 2021, but the new report from the Labor Department offers a fresh round of good news. Reuters reported this morning:
Fewer Americans filed new claims for unemployment benefits last week, as companies held on to their workers amid the growing labor shortage that helped to curb job growth in April. Initial claims for state unemployment benefits totaled a seasonally adjusted 473,000 for the week ended May 8, compared to 507,000 in the prior week, the Labor Department said on Thursday. Economists polled by Reuters had forecast 490,000 applications for the latest week.
As we discussed last week, it was in March 2020 when jobless claims first spiked in response to the COVID-19 crisis, climbing to over 3 million. That weekly total soon after reached nearly 7 million as the economy cratered. For 55 consecutive weeks, the number of Americans filing for unemployment benefits was worse than at any time during the Great Recession.
And now, that's no longer the case. In fact, today's report was the best since the start of the pandemic, and the new totals reflect a 20% improvement just over the last two weeks.
To be sure, it'd be a mistake to see 473,000 jobless claims as good news on its own. Under normal circumstances, this would be an awful total. In the early months of 2020, for example, the U.S. average on unemployment claims was roughly 211,000 -- well under half of the total from today's report.
But given what Americans have been dealing with throughout the pandemic, these new figures are worth feeling good about.
Some of the recent economic data is more encouraging than others -- the overall job totals from April were obviously far short of expectations -- but as today's data reminds us, there are multiple indicators suggesting the U.S. recovery is real and headed in the right direction.