U.S. Jobless Claims Fall to Another Pandemic Low

Jobless claims declined to a new pandemic low last week, in a sign hiring is primed to strengthen as workers return to the labor market.

Unemployment claims fell to 473,000 last week from a revised 507,000 a week earlier, the Labor Department said Thursday. Claims are now at the lowest level since mid-March 2020, when the pandemic shut down the economy. They remain more than twice as high as levels seen before the pandemic struck last spring.

“Employers are really clinging to their talent,” said Jay Denton, chief analyst for ThinkWhy, a labor-analytics firm. “There’s a lot of demand there. We will start to see more hiring.”

Higher vaccination rates, fiscal stimulus and easing business restrictions are converging to support stronger spending across the U.S. But job growth isn’t keeping pace. U.S. employers added a modest 266,000 jobs in April, far short of the one million that economists had forecast and the weakest monthly gain since January.

Many employers say they can’t find enough workers to meet surging demand, in turn limiting production. Economists cite several factors keeping workers on the sidelines, including expanded $300 unemployment benefits, individuals’ fear of contracting Covid-19 and child-care burdens due to school closures.

Those constraints could ease in September as the supplemental jobless benefits end and more schools reopen, said James Knightley, ING’s chief international economist. He expects companies will increase pay to attract more workers in the interim.