U.S. Jobless Claims Extend Decline to New Pandemic Low

Worker filings for jobless benefits fell again to a fresh pandemic low, extending a steady downward trend and adding to signs of a healing labor market as the economy opens more fully.

Initial unemployment claims for regular state programs, a proxy for layoffs, fell last week to 406,000 from 444,000 the prior week, the Labor Department said Thursday. That level represents the lowest levels of claims since the coronavirus pandemic’s onset last year and the fourth consecutive week claims have reached a new pandemic low. Economists surveyed by The Wall Street Journal had forecast there were 425,000 new claims last week.

Separately, the Commerce Department reported that orders for durable goods—items designed to last at least three years—fell 1.3% in April, and U.S. gross domestic product in the first quarter grew at a 6.4% seasonally-adjusted annual rate, the same as initially estimated.

Taken together, the data point to a labor market that is gaining strength as Covid-19 cases steadily decrease, more Americans receive vaccines against the virus and governments ease restrictions on businesses, although the broader economic recovery remains uneven.

“I think there’s still a lot of pain out there, but the good news is that it really looks like the economy is kicking into overdrive, and I do see positive signs for the job market,” said Beth Ann Bovino, chief U.S. economist at S&P Global Ratings.

Dr. Bovino noted that U.S. employment overall is down by more than eight million jobs compared with pre-pandemic levels. Meanwhile, initial jobless claims remain higher than before the pandemic. The number of Americans continuing to receive unemployment benefits through regular state programs fell in the week ended May 15, after rising the previous week.

As of early May, nearly 16 million Americans were continuing to claim benefits through all unemployment programs, including special programs designed to support workers through the pandemic. Some businesses and Republican lawmakers have recently expressed rising concern that one of those programs, which provides benefit recipients with a $300 federal supplement, may be constraining employers’ ability to hire workers.