U.S. jobless claims drop to lowest level since pandemic hit

The number of Americans applying for unemployment benefits dropped by 13,000 last week, to 553,000, the lowest level since the pandemic hit last March and another sign the economy is recovering from the coronavirus recession.

The Labor Department reported Thursday that jobless claims were down from 566,000 a week earlier. They have fallen sharply over the past year, but remain well above the 230,000 weekly figure typical before the pandemic struck the economy in March 2020.

The four-week moving average, which smooths out weekly gyrations, fell 44,000, to 611,750.

In Indiana, 14,334 people filed initial unemployment claims in the week ended April 24, up from an adjusted number of 14,026 the previous week. Prior to the pandemic, the state was typically seeing fewer than 3,000 claims per week.

A total of 59,196 people were receiving traditional unemployment benefits in Indiana as of April 17, the Labor Department said. That was up from 58,333 the previous week.

Nationally, nearly 3.7 million people were receiving traditional state unemployment benefits the week of April 17. Including federal program designed to ease economic pain from the health crisis, 16.6 million were receiving some type of jobless aid the week of April 10.

“Layoffs are elevated but are gradually easing, consistent with an economy that is reopening,” said Rubeela Farooqi, chief U.S. economist at Hgh Frequency Economics. “We expect further declines in filings as businesses move closer towards normal capacity which will boost job growth over coming months.”

Unemployment claims are a proxy for layoffs, and economists have long viewed them as an early indicator of where the job market and the economy are headed. But the figures have become less reliable in recent months as states struggle to clear backlogs of applications and suspected fraud muddies the actual volume of claims.

The job market has been bounding back in recent months. Employers added an impressive 916,000 jobs in March, and the Labor Department is expected to report next week that they hired another 875,000 in April, according to a survey from the data firm FactSet. The unemployment rate has dropped to 6% from a peak of 14.8% in April 2020. (Before the pandemic, unemployment was just 3.5% in February 2020.)

Employers are beginning to complain that they can’t find workers —despite an elevated unemployment rate. Americans may be reluctant to return to work because they still fear contracting the virus or because they need to care for children who haven’t returned to school. Another factor could be a federal supplemental unemployment benefit of $300 a week, on top of state aid, that means many low-income workers can earn more from jobless benefits than they did from their old jobs.