Last week, the number of Americans claiming unemployment benefits decreased for the fourth time in a row to a pandemic low, the latest indicator that America's labor market is recovering from the pandemic recession, as employers ramp up hiring to meet increased consumer demand.
Jobless claims decreased by 29,000 to 348,000, according to the US Department of Labor. The four-week average of claims, which smooths out week-to-week fluctuations, dropped by 19,000 to little under 378,000, a pandemic low.
Since peaking at 900,000 in early January, the weekly rate of unemployment compensation applications has been progressively declining. The decrease in the number of first-time unemployment claims has corresponded with the widespread use of vaccines, prompting companies to reopen or extend their hours, bringing customers back to stores, restaurants, airports, and entertainment venues.
Still, the number of applications remains high by historic standards: Before the pandemic tore through the economy in March 2020, the weekly pace amounted to around 220,000 a week. And now there is growing concern that the highly contagious delta variant could disrupt the economy’s recovery from last year’s brief but intense recession. Some economists have already begun to mark down their estimates for growth this quarter as some measures of economic activity, like air travel, have started to weaken.
Filing for unemployment benefits has traditionally been regarded as a real-time indicator of the health of the labor market. Their dependability, however, has deteriorated during the pandemic. In many states, weekly figures have been inflated by fraud and multiple filings by unemployed Americans attempting to navigate bureaucratic hurdles in order to obtain benefits. These complications help to explain why the number of applications continues to be relatively high.
By all accounts, the job market has been bouncing back with vitality since the pandemic paralyzed economic activity last year and employers cut more than 22 million jobs. Since then, the United States has recovered 16.7 million jobs. In addition, employers have added jobs for three months in a row, including a strong 943,000 in July. Meanwhile, employers have posted a record 10.1 million job openings, and many complain that they are unable to find enough qualified candidates to fill their open positions.