In another sign of an improving economy, new regular weekly unemployment are falling. Nationally, the U.S. Department of Labor reports just 406,000 new claims last week.
In the week ending May 22, the advance figure for seasonally adjusted initial claims was 406,000, a decrease of 38,000 from the previous week’s unrevised level of 444,000. This is the lowest level for initial claims since March 14, 2020 when it was 256,000. The 4-week moving average was 458,750, a decrease of 46,000 from the previous week’s unrevised average of 504,750. This is the lowest level for this average since March 14, 2020 when it was 225,500.
The advance seasonally adjusted insured unemployment rate was 2.6 percent for the week ending May 15, a decrease of 0.1 percentage point from the previous week’s unrevised rate.
In Washington, the state Employment Security Department reports a large drop in claims from the prior week (remember, that prior week’s claims reflected an uptick in fraudulent filings). The ESD press release today states,
During the week of May 16 – May 22, there were 11,666 initial regular unemployment claims (down 40.5 percent from the prior week) and 416,462 total claims for all unemployment benefit categories (down 11.2 percent from the prior week) filed by Washingtonians, according to the Employment Security Department (ESD).
- Initial regular claims applications are now 76 percent below weekly new claims applications during the same period last year during the pandemic.
- The 4-week moving average for initial claims remain elevated at 14,599 (as compared to the 4-week moving average of initial claims pre-pandemic of 6,071 initial claims) and remains at similar levels of initial claims filed during the Great Recession.
- Initial claims applications for regular benefits, Pandemic Emergency Unemployment Compensation (PEUC), Pandemic Unemployment Assistance (PUA) as well as continued claims for regular benefits all decreased over the week.
- Decreases in layoffs in Health Care and Social Assistance, Retail Trade, and Construction contributed to the decrease in regular initial claims last week.
The Associated Press writes of the drop in claims nationally,
The decline in applications reflects a swift rebound in economic growth. The government separately estimated Thursday that the economy expanded at a strong annual pace of 6.4% in the first three months of this year, unchanged from its initial estimate. More Americans are venturing out to shop, travel, dine out and congregate at entertainment venues. All that renewed spending has led companies to seek new workers, which helps explain why a record number of jobs is now being advertised.
Labor shortages remain a problem.
Yet many businesses complain that they can’t find enough applicants for all those open jobs, even though the unemployment rate remains 6.1%, well above the 3.5% rate that prevailed before the pandemic struck in March of last year. Job growth slowed sharply last month compared with March, a surprise pullback that was largely ascribed to a labor shortage in some industries.
Economists blame a range of factors for the shortfall of workers, including an extra $300-a-week payment that people receiving jobless aid have been able to get, on top of their state unemployment check, since March. The federal benefit was included in President Joe Biden’s $1.9 trillion rescue package. With many people able to earn more from their combined federal and state jobless aid than from their former jobs, the extra income has likely discouraged some of the unemployed from seeking work, some analysts say.
Adding to the economic good news today is the report that Q1 GDP growth came in at an annual rate 6.4%.