US jobless claims decline to 444,000, a new pandemic low
The number of Americans seeking unemployment aid fell last week to 444,000, a new pandemic low and a sign that the job market keeps strengthening as consumers spend freely again, viral infections drop and business restrictions ease.
Thursday's report from the Labor Department showed that applications declined 34,000 from a revised 478,000 a week earlier. The number of weekly jobless claims — a rough measure of the pace of layoffs — has declined steadily since the year began.
The data release coincides with rapid moves by nearly all the nation''s Republican governors to cut off a USD 300-a-week federal unemployment benefit that they and many business executives blame for discouraging the unemployed from seeking jobs. Those cutoffs of federal jobless aid will begin in June.
Twenty-two states, from Texas and Georgia to Ohio and Iowa, have acted to block the federal government's USD 300 weekly payment for the unemployed, according to an Associated Press analysis.
Two more states, Florida and Kansas, are considering doing so. Those 24 states all have Republican governors and state legislatures.
Unemployed Americans have been able to receive the federal benefit, which was included in President Joe Biden's $1.9 trillion financial rescue package, on top of their state jobless aid.
Combined, the cutoff of federal jobless aid in the states that are targeting it would reduce unemployment benefits for 3.5 million people, according to Oxford Economics.
About 16 million people were receiving unemployment benefits during the week ending May 1, the latest period for which data is available, the government said Thursday.
That is down from 16.9 million in the previous week, and it suggests that some Americans who had been receiving aid have found jobs.
Eliminating the USD 300-a-week federal unemployment benefit is among measures that states have taken to restrict or eliminate jobless aid and press more recipients to seek work.
That trend gained momentum after the April jobs report, released earlier this month, showed that employers added far fewer jobs than expected, in part because many couldn't find enough workers.
Twenty-one states say they will also cut off all benefits for the self-employed and gig workers, who became newly eligible for jobless aid under a relief package that was enacted in March last year.
In addition, 35 states have reinstated a requirement that jobless aid recipients search for work in order to keep receiving benefits.
That requirement had been suspended at the start of the pandemic, when many businesses were closed and Americans were encouraged to stay at home.
As the economy quickly recovers from the pandemic recession, consumers are showing more confidence and spending at a healthy rate. Most economists think the economy could expand 7 per cent this year, which would amount to the fastest annual growth in more than 35 years.
Yet the rapid reopening from the pandemic has created a wide range of supply shortages that have disrupted what economists had hoped would be a smooth rebound.
Home building fell sharply in April, for example, as builders struggled with shortages of lumber and labor.
The shortages have caused a spike in inflation, which led stock markets to tumble this week because investors worry that higher prices will force the Federal Reserve to prematurely cut back on its efforts to stimulate growth.
Fed officials have stressed their belief that the accelerating price increases are temporary. But the minutes of their April policy meeting, released Wednesday, showed that some Fed officials support a discussion at future meetings about dialing back their efforts.