(AP) — The number of Americans applying for unemployment benefits
has dropped to its lowest level since the pandemic
hit last year, indicating that the U.S. economy
and job market are rapidly recovering from the pandemic recession.
The Labor Department
reported on Thursday that jobless claims
fell by 26,000 last week to 360,000. The weekly tally, which is a proxy for layoffs
, has been falling steadily since topping 900,000 in early January.
The recovery from the recession in the United States
so quickly that many economists predict that the economy will grow by roughly 7% this year, the fastest pace since 1984.
Despite a recent uptick, the rollout of COVID-19 vaccines
has sharply reduced new viral
cases, from a seven-day average of around 250,000 in early January to roughly 25,000 recently. As the health
crisis has subsided, cooped-up Americans have increasingly emerged from their homes, eager to spend on things they had missed during pandemic lockdowns — dinners out, a round of drinks, sports
Businesses have scrambled to meet the unexpected surge in customer demand, posting job openings — a record 9.2 million in May — faster than they can fill them, forcing employers to raise wages and, in some cases, raise prices to offset higher labor costs.
Many Americans still have health concerns about working in large crowds. Many people
, mostly women
, are no longer working or looking for work because they had to care for children
and day care centers closed. Finally, roughly 2.6 million older workers took advantage of expanded stock portfolios and re-entered the labor force.
A temporary $300-a-week federal unemployment benefit, on top of regular state jobless aid, may be allowing some people to be more selective in looking for and accepting jobs
. Roughly half of the states plan to stop paying the supplement by the end of July, in what supporters say is an effort to nudge more unemployed people to look for work.
Employers added 850,000 jobs last month, and hourly pay rose 3.6% year on year — faster than the pre-pandemic annual rate and evidence that companies are being forced to pay more to attract and retain workers. Despite this, the United States is still 6.8 million jobs short of the number it had in February 2020, just before the virus erupted across the country and paralyzed the economy.
And, by historical standards, weekly applications for unemployment benefits remain high: just before the pandemic, they averaged around 220,000 per week. Overall, 13.8 million Americans received some form of unemployment assistance during the week of June 26, down from 30.6 million the previous year.