The number of Americans applying for unemployment benefits with the states continued to decline last week to a new low pandemic, signaling that layoffs continue to decline.
The number of Americans seeking unemployment benefits fell last week to 473,000, a new low coronavirus pandemic and the latest evidence indicating fewer employers are reducing jobs as consumers increase spending and reopen more businesses.
The U.S. Department of Labor report Thursday showed that applications dropped 34,000 from a 507,000 reviewed a week earlier. The number of weekly unemployment claims – an approximate measure of the rate of redundancies – has fallen significantly from a high of 900,000 in January. Instead of reducing jobs, many employers have difficulty attracting enough job candidates.
With hiring, increasing vaccinations and the acceleration of the economy, consumers have gained more confidence and, on average, are within reach of cash after limiting spending during the pandemic. Stimulus checks have also bolstered many bank accounts.
Now, more Americans are venturing out to shop, travel, dine and meet at entertainment venues. The reopening has taken place so quickly that many companies are still not able to staff as quickly as they would like.
Economists monitor unemployment claims on a weekly basis to detect the first signs of where the labor market is heading. Since the onset of the pandemic, however, these figures have become a less reliable barometer than they usually are. States have struggled to eliminate the remnants of unemployment claims. And the alleged fraud has clouded the actual volume of job cuts.
In April, employers added 266,000 jobs, far fewer than expected and a sign that some companies were struggling to find enough workers. The surprisingly low earnings raised concerns that companies may have difficulty hiring quickly, as the economy continues to improve and the recovery in pre-pandemic employment levels may take longer than expected.
In Thursday’s report, the government said about 16.9 million people were receiving unemployment benefits during the week of April 24, the last period for which data is available. This exceeds the 16.2 million of the previous week. The increase occurred primarily in California and Michigan. More than 600,000 people in these two states joined the federal unemployment benefit program that was created for concert workers and contractors.
Several reasons explain why many people who are unemployed may be reluctant to take care of themselves. Some worry that working in restaurants, hotels or other service industries will expose them to the virus, according to government surveys. In addition, many women, especially working mothers, have had to leave the workforce to care for children who are still in online school at least part of the week.
And a federal unemployment benefit of $ 300 a week will likely discourage some of the unemployed from looking for work. For the unemployed who earned less than $ 32,000 a year in their previous jobs, federal aid combined with unemployment plus state benefits means they receive at least the same amount of unemployment benefits as when they were doing work, according to an estimate by Bank of America economists.
President Joe Biden, who included the overpayment in his $ 1.9 trillion bailout package approved in March, argued earlier this week that the $ 300 payment is to blame for the $ hiring last month. But he also urged the Department of Labor to work with states to renew the requirements that unemployment benefit recipients must look for jobs and take a position if offered. The job search rule was suspended during the pandemic, when many companies closed and job opportunities were few.
“Anyone who covers unemployment to which they are offered a suitable job should take the job or lose their unemployment benefit,” Biden said.