The number of Americans applying for unemployment benefits fell to its lowest level since theslammed the economy in March of 2020.
The U.S. Department of Labor said Thursday that 376,000 people applied for jobless claims for the first time last week, the sixth straight weekly decline.
Nearly 3.5 million were receiving traditional state unemployment benefits the week of May 29, down by 258,000 from 3.8 million the week before. Before the pandemic brought economic activity to a near-standstill in March 2020, weekly applications were regularly coming in below 220,000.
"The latest drop in continuing claims reminds us that a recovery in hiring is on track although it may occur at an uneven and gradual pace as constraints on labor supply are resolved," Nancy Vanden Houten of Oxford Economics, said in a report.
The number of jobless claims, a proxy for layoffs, has fallen steadily this year as more people head out to shop, travel, dine and congregate at entertainment venues as COVID-19 ease.
As of May 22, more than 15 million people were collecting some form of unemployment. Starting next week, the amount individuals get each week will drop in 25 states around the U.S. that are pulling the plug on.
"Filings will be impacted over coming weeks as 25 states end enhanced unemployment insurance and other federal benefits early," Rubeela Farooqi, chief U.S. economist with High Frequency Economics, told investors in a research note. "It is still unclear that a decline in these levels will lead to a substantial recovery in jobs and send an accurate signal about labor market conditions."
The Labor Department reported Tuesday that job openings hit a record 9.3 million in April. Layoffs dropped to 1.4 million, lowest in records dating back to 2000, while 4 million people quit their jobs in April, another record and a sign that they are confident enough in their prospects to try something new.
In May, the U.S. economy generated 559,000 million new jobs, and the unemployment rate dropped to 5.8% from 6.1% in April. Many economists expected to see even faster job growth. The U.S. is still short 7.6 million jobs from where it stood in February 2020.