By Natalie DeCoste
This week’s report on initial jobless claims by the Labor Department reveals that workers filing for benefits have hit a new pandemic record, and this time it’s for the better.
The Labor Department reported that seasonally adjusted initial claims are 364,000, a decrease of 51,000 from the previous week’s revised level. The latest data is the lowest level for initial claims since the start of the pandemic on March 14, 2020, when it was 256,000.
“We are seeing labor-market progress,” said AnnElizabeth Konkel, an economist at job-search site Indeed. She added that “we still have just a little bit more ways to go” before unemployment claims reach pre-pandemic levels.
The drop in initial unemployment claims brought the four-week moving average for continuing claims, which lessens weekly volatility, down to 392,750, a decrease of 6,000 from the previous week’s revised average. This is the lowest level for this average since March 14, 2020, when the average was 225,500. The previous week’s average was revised up by 1,000 from 397,750 to 398,750.
The decline in jobless claims is a positive sign for the economy and a better drop than economists expected. Applications for unemployment benefits have now fallen in 10 of the past 12 weeks.
The report comes right before the highly anticipated nonfarm payrolls count for June coming this Friday. That report is expected to show a gain of 706,000 compared to May’s 559,000 and a decrease in the unemployment rate to 5.6%.
Even with the progress in the labor market, the economy is still not where it needs to be to match its pre-pandemic strength. Currently, the market is roughly 6.6 million jobs smaller than it was just ahead of the pandemic.
“There are still many things in the air for this economic recovery to be stable—vaccination rates, the evolution of new strains, the rest of the world’s economy,” said Alfredo Romero, an economist at North Carolina A&T State University.
At a state level, the report revealed that some states are still struggling more than others to get their populations back to work. The highest insured unemployment rates in the week ending June 12 were in Rhode Island (5.1), Nevada (4.4), Puerto Rico (3.9), Connecticut (3.8), California (3.6), Illinois (3.6), Alaska (3.4), New York (3.4), Pennsylvania (3.3), and District of Columbia (3.2).
Meanwhile, the largest increases in initial claims for the week ending June 19 were in Pennsylvania (+14,715), Michigan (+1,862), and Texas (+1,814), while the largest decreases were in Illinois (-4,762), California (-4,112), Ohio (-2,955), Florida (-2,229), and Georgia (-1,826). Data also revealed that during the week ending June 12, 50 states reported 5,935,630 continued weekly claims for Pandemic Unemployment Assistance benefits.
The fall in jobless claims is attributed to the reopening of states as more people receive their vaccines. Consumers are spending and traveling more, assisted by the government stimulus checks distributed earlier in the year, which will play a major role in the economic recovery seen over the summer.
According to the Labor Department, job openings have reached record levels with roughly 9.3 million unfilled positions, which is the highest level on records back to 2000.
