Initial unemployment claims fell for a fourth straight week to set a new 14-month low as the labor market recovery made further strides toward recovering jobs lost during the pandemic.
The Department of Labor released its weekly report on new jobless claims Thursday at 8:30 a.m. ET. Here were the main metrics from the report, compared to consensus data compiled by Bloomberg:
Initial jobless claims, week ended May 22: 406,000 vs. 425,000 expected and 444,000 during the prior week
Continuing claims, week ended May 15: 3.642 million vs. 3.680 million expected and a revised 3.738 million during the prior week
As a greater percentage of the U.S. population becomes inoculated against COVID-19, more businesses have reopened and more social distancing standards have been eased. According to data from the Centers for Disease Control and Prevention, half of all Americans have now received at least one dose of a COVID-19 vaccine.
This has in turn slowed the pace of layoffs and other separations, allowed more individuals to return to the workforce and pushed new weekly jobless claims closer toward their pre-pandemic pace of just over 200,000 per week.
"More lifting of COVID-19 restrictions by governments and businesses, coupled with further progress on vaccinations, are helping to propel more mobility and spending on the part of consumers," Mark Hamrick, senior economic analyst at Bankrate, said in an email Wednesday. "In turn, businesses are doing what they can to position their labor and other resources to meet demand. As is widely understood now, some employers are struggling to hire all of the workers they want for a multitude of reasons."
Still, however, an elevated number of Americans are still claiming unemployment benefits, even as the pace of new filings slows. More than 15.8 million individuals were claiming benefits of some form as of the week ended May 8. This included more than 11.5 million individuals on federal crisis-era unemployment benefits including Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation, which were started in the past year to alleviate some of the strain due to COVID-related job losses.
But with COVID-19 infection rates falling to a near one-year low and more businesses reopening and struggling to find workers, a number of states are now rolling back some of these crisis-era benefits. Nearly two dozen states are slashing the federal $300 per week in unemployment benefits as soon as in mid-June, while the federal expiration date for these benefits is set for Sept. 6.
Some have viewed these enhanced benefits as incentive for workers to stay on the sidelines, exacerbating labor shortages many in the service sector especially have been witnessing. Others, however, have said the benefits provide a necessary economic cushion for workers that have been disproportionately impacted by fallout from the pandemic.
"No one knows for sure why people have been reluctant to return to the labor market — we're assuming it is due to a combination of COVID fear, childcare difficulties, and the $300 per week federally-funded enhancement to unemployment benefits — but the numbers are huge," Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in a note earlier this week. "The labor force in April was some 5M smaller than we would have expected if the pandemic hadn't happened."
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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