U.S. Unemployment Claims Fall to Under 700,000, Lowest Since Pandemic
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More than 18.9 million people still are collecting benefits, but economists are confident hiring will pick up.
First-time unemployment claims dropped sharply last week, the latest sign that hiring has ramped up as the economy continues to reopen, according to numbers released Thursday by the U.S. Department of Labor.
Claims fell to 684,000 for the week ending March 20, a drop of 97,000 from the previous week and the first time that claims have dipped below 700,000 since the onset of the Covid-19 pandemic last year. Applications had never totaled above 700,000 before then, according to federal data. The previous record was 695,000, in October 1982.
Continuing unemployment claims, which run a week behind, also declined, dropping to 3.87 million, a decrease of 264,000.
Still, more than 18.9 million people are collecting unemployment benefits, up from 18.2 million the previous week. In the same week last year—at the very beginning of the pandemic—only about 2 million people filed for benefits. About a third of current recipients are receiving extended federal benefits, meaning they’ve been unemployed for a minimum of six months.
Despite that, some economists are confident that hiring will pick up in the coming months, aided partially by the $1.9 trillion stimulus package approved by Congress earlier this month. Forecasters at the Brookings Institution expect gross domestic product to increase by roughly 6%, enough to restore economic output to pre-pandemic levels by the end of 2021.
If those predictions hold, job creation is likely to pick up as well, said Louise Sheiner and Gian Maria Melisi-Ferretti, two senior fellows at the Brookings Institution.
“This will not be another jobless recovery,” they wrote in an analysis this week. “If the GDP forecasts prove accurate, we estimate that monthly payroll employment gains over the next 10 months will average between 700,000 and 1 million per month, a lot faster than many forecasters anticipate.”
States with the largest increases in initial unemployment claims last week included Texas (a jump of 24,492), Illinois (13,692), Indiana (4,728), Alabama (2,914) and Massachusetts (2,560). States with the biggest drops included Ohio (a decrease of 12,987), West Virginia (3,321), South Carolina (2,711), Mississippi (2,117) and New York (935).
Kate Elizabeth Queram is a staff correspondent for Route Fifty and is based in Washington, D.C.
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