By Amara Omeokwe
Worker filings for jobless benefits declined to 547,000 last
week, a new pandemic low that adds to evidence of a strengthening
labor market and overall economic recovery.
Initial unemployment claims, a proxy for layoffs, fell 39,000
last week from an upwardly revised 586,000 the prior week, the
Labor Department said on Thursday. That put new claims on a
seasonally adjusted basis below 600,000 for two consecutive weeks
in mid-April, their lowest levels since early 2020. The four-week
moving average, which smooths out volatility in the weekly figures,
was 651,000, also a pandemic low.
The median sales price for previously owned homes climbed to a
record high in March as a shortage of homes during the pandemic
limited transactions, the National Association of Realtors said
separately. Existing-home sales dropped 3.7% in March from February
to a seasonally adjusted annual rate of 6.01 million, marking the
second straight month of sales declines.
Jobless claims remain higher than their pre-pandemic levels --
the weekly average in 2019 was about 218,000 -- but last week's
drop extended a downward trend since the start of this year and
raised expectations for further declines in coming weeks.
"This dip in jobless claims looks good in isolation but what
really matters is that it confirms that last week's unexpected
plunge was no fluke," said Ian Shepherdson, chief economist at
Pantheon Macroeconomics, in a note to clients. The claims report
indicates that layoffs are falling quickly, he added.
Initial jobless claims since last fall hadn't declined below a
range of roughly 700,000 to 900,000, despite other data that
pointed to a pickup in the labor market. The unemployment rate in
March, for example, fell to 6.0%, a pandemic low.
Claims levels "didn't match up with the improvements we've seen
in the labor market," said Gus Faucher, chief economist at PNC
Financial Services Group. "We have been waiting to see an
improvement," he added.
A confluence of factors has offered signals that the economic
recovery is accelerating, including a surge last month in retail
sales and jobs added as Covid-19 vaccination totals increased and
the economy more fully reopened. Economists surveyed by The Wall
Street Journal in April forecast on average that U.S. gross
domestic product grew at a 5.59% annual rate during the first
quarter of 2021. That was up from an average forecast of 2.21%
growth from the January survey.
Recent federal stimulus aid has sent many households direct cash
payments. Meanwhile, about a third of U.S. adults age 18 or over
have been fully vaccinated, and more than half have received at
least one dose, according to the Centers for Disease Control and
The country's seven-day moving average of reported Covid-19
cases increased during March and into April, but remains below
recent peaks reached at the start of the year. In turn, many state
and local governments have eased restrictions on business
Continuing jobless claims -- a proxy for the number of people
receiving benefits through regular state programs -- fell to 3.67
million in the week ended April 10, a decline of 34,000 from the
prior week. The four-week moving average in continuing claims also
"I do think that we are seeing real improvement in the labor
market, and claims will continue to gradually move lower probably
through the rest of this year," said Gus Faucher, chief economist
at PNC Financial Services Group.
He added that the pace of vaccinations and business reopenings
bode especially well for activity at services businesses, such as
dining as well as leisure and hospitality. Consumer spending during
the pandemic trended away from services and toward goods, and job
losses were acute for services businesses as Americans stayed home
to avoid contracting the virus.
"As people feel more comfortable with face-to-face,
close-contact behavior, we'll see people spending in those services
and we'll see those industries rebounding," Mr. Faucher said. "That
will bring more jobs and higher incomes, and that in turn is going
to support consumer spending as well."
Consumer spending is the driving factor for U.S. economic
growth, accounting for roughly two-thirds of output.
Peggy Shell, chief executive and founder at Creative Alignments,
a Boulder, Colo.-based staffing firm, said she recently added three
new staffers to the company, bringing the total to 26 part- and
full-time workers. Two more workers are scheduled to start.
Ms. Shell's company specializes in staffing for technology and
natural-products companies, and she said she is adding workers as
demand for her firm's services increases. She said business for
many of her clients started to rebound last year and has gained
momentum in 2021, prompting them to look to expand.
Ms. Shell said vaccines are helping drive the optimism she is
hearing among clients.
"I do think that this hope of the country opening even more has
allowed people to feel even more comfortable in their growth
plans," she said.
Still, the U.S. economy as of March had roughly 8.4 million
fewer jobs than before the pandemic started. Overall, about 17.4
million Americans were collecting unemployment benefits through
state, federal and pandemic-related programs in the week ended
April 3, up from 16.9 million the prior week.
Daniel Zhao, senior economist at jobs website Glassdoor, said
enhanced unemployment benefits could be a factor for people in
applying for claims, contributing to the continued high levels.
States during the pandemic, meanwhile, have struggled with
fraudulent unemployment claims.
Lack of adequate child care for some workers and lingering fears
of contracting the virus were among other factors likely
constraining current job gains, Mr. Zhao added.
"That's something that's not going to go away until the pandemic
is more close to being over," he said.
Write to Amara Omeokwe at email@example.com
(END) Dow Jones Newswires
April 22, 2021 11:09 ET (15:09 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.