WASHINGTON (AP) — The number of Americans seeking unemployment benefits
fell to 406,000 last week, a new pandemic
low and further evidence that the job market is improving as the virus fades and the economy
The Labor Department
reported on Thursday that applications for jobless benefits fell 38,000 from 444,000 the previous week, indicating that the number of weekly applications for jobless benefits — a rough measure of the pace of layoffs — has dropped by more than half since January.
The drop in applications reflects a rapid recovery in economic growth, with more Americans venturing out to shop, travel, dine out, and congregate at entertainment
venues. All of that renewed spending has led companies to seek new workers, which helps to explain why a record number of jobs
are now being advertised.
Despite the fact that the unemployment rate remains 6.1%, well above the 3.5% rate that prevailed before the pandemic hit in March of last year, many businesses complain that they can't find enough applicants for all of those open jobs. Job growth slowed sharply last month compared to March, a surprise pullback that was largely attributed to a labor shortage in some industries.
Economists blame a variety of factors for the labor shortage, including a $300-per-week payment that people
receiving jobless benefits have been able to get on top of their state unemployment check since March, as part of President Joe Biden
's $1.9 trillion rescue package.
Others are still hesitant to work in restaurants
, hotels, and other service industries for fear of contracting COVID-19
, and some women
are unable to return to work without adequate child care, despite recent research
by two economists finding that this factor has a relatively minor impact.
Complaints from businesses that they can't find enough workers have prompted the majority of Republican
governors to cut unemployment benefits. Twenty-four states, including populous ones like Texas
, and Arizona
, have said they will stop paying the supplemental $300-a-week federal jobless payment beginning in June.
Twenty of those states have also announced that they will withdraw from two emergency programs, one of which covers self-employed and gig workers and the other which provides assistance to people who have been out of work for more than six months. The withdrawals from those two programs could cost at least 2.5 million people all of their unemployment benefits.