By Nathalie Voit

Unemployment claims fell to their lowest level since the start of the COVID-19 pandemic, according to Department of Labor (DOL) data released Oct. 28.

Last week, unemployment insurance weekly claims decreased to 281,000 from a revised 291,000 the week before, DOL data revealed. The report revealed a 4-week moving average of 299,250, substantially lower than the recent peak of 424,000 recorded in July but higher than the 218,000-weekly average of 2019.

Jobless claims continued to decline throughout the summer as federal stimulus money helped buffer the fallout from pandemic-related layoffs.

Jobless claims “continue to trend lower, gradually moving closer to levels prevailing prior to the recession,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics, wrote in a research report. “Businesses are holding on to workers amid reports of severe labor shortages.″

Initial jobless claims are important for gauging the strength of the job market. Low filings for unemployment benefits means fewer layoffs since workers who voluntarily quit their jobs don’t qualify for unemployment aid. The dramatic decrease in jobless claims points to worker confidence in the labor market.

“It has been a challenge for employers, especially in low-paid service jobs, to keep workers on staff,” said Nela Richardson, an economist at Automatic Data Processing Inc.

The strong demand for workers arrives amid what many economists are dubbing “The Great Resignation.” A record number of workers this year quit their job, according to Labor Department data. Between July and April of 2021, U.S. workers handed in a total of 20 million resignations. In August alone, 4.3 million workers left, the highest monthly figure in over two decades.

“We aren’t seeing that wave of job seekers coming back, and that’s because, first and foremost, we’re still in a pandemic,” said AnnElizabeth Konkel, an economist at the Indeed Hiring Lab. “Employers are trying to figure out, ‘how do I get the workers I need?’ and using different tools to do that,” like offering better pay, expanded benefits, or starting bonuses, she said.