U.S. Unemployment Claims Fell to 498,000 Last Week

Weekly unemployment claims fell to 498,000 last week—a new low since the Covid-19 pandemic began more than a year ago—in a fresh sign that the labor-market rebound is gathering force.

Worker filings for jobless claims, a proxy for layoffs, fell 92,000 last week from 590,000 the prior week. That brings the four-week average of initial claims, which smooths out volatility in weekly data, to the lowest point since the pandemic took hold, though still well above pre-pandemic levels.

“Overall it looks like we’re seeing healing in the jobs market,” said Beth Ann Bovino, U.S. chief economist for S&P Global Ratings.

“That’s much better than just over a year ago, but that’s still double what there was pre-crisis,” she said. “It would be [considered] bad in a normal recession, let’s just put it that way.”

With more than two-fifths of U.S. adults now fully vaccinated, Americans are spending on restaurant meals, travel and other services that they had shunned over the past year due to fear of Covid-19 and business restrictions. At the same time, government stimulus is boosting economic activity more generally.

Economists are closely watching unemployment-claims numbers for signs that companies are holding on to workers as businesses scramble to keep up with the upswing in demand.

This improvement will likely be captured in the Labor Department’s April employment report, which the department will release Friday. Economists forecast that the U.S. economy added one million jobs last month, compared with a gain of 916,000 in March, and project that the jobless rate ticked down to 5.8% from 6% a month earlier.