The number of Americans filing for unemployment benefits has fallen for the third straight week, a good sign for America’s economic recovery from the coronavirus pandemic.
According to data released by the Department of Labor, around 779,000 people filed for first-time unemployment benefits for the week ending on Jan. 30. That number comes after a winter surge of jobless claims. First-time claims were the lowest they have been since the week ending Nov. 28. The easing of jobless claims, which is a proxy value for layoffs, pointed to a stabilization in the number of workers applying for benefits.
The number of claims is also less than the 830,000 new claims economists surveyed by Dow Jones predicted. Despite the better than expected numbers, jobless claims are still well above the pre-pandemic peak of 695,000 and are higher than any previous recession for records tracing back to 1967.
“Approaching the one-year mark of the pandemic, it is quite striking that new claims remain so elevated. It is not only the depth but also the duration of the downturn taking a toll. As of the latest count, 17.8 million Americans were on some form of unemployment assistance,” said Mark Hamrick, senior economic analyst at Bankrate.
Continuing unemployment claims, a number that trails behind new filings by a week, is at 4.5 million as opposed to the 4.7 million expected. The pandemic peak for continuing claims was 24.9 million in early May.
States have also reported continuing claims for unemployment benefits related to the pandemic. According to the Department of Labor, the 50 states reported 7,217,713 continued weekly claims for Pandemic Unemployment Assistance benefits and 3,603,098 continued claims for Pandemic Emergency Unemployment Compensation benefits.
The new jobless claims numbers come a day before the government releases a more detailed look at U.S. employment in January. Economists predict that employers added 50,000 jobs during January, following a significant decline of 140,000 in December. December’s decrease marked the first decrease in payrolls in the last seven months. The unemployment rate is forecast to hold steady at 6.7%.
“The economy’s struggles remain most evident in the job market. Employment declined in December, and will eke out only a small gain of no more than 200,000 in January. Employment is still down almost 10 million from its pre-pandemic peak, with employment down across every major sector save the federal government,” said Mark Zandi, chief economist at Moody’s Analytics.
The course of the economy is not expected to change significantly until the course of the virus does. Federal Reserve Chairman Jerome Powell has consistently noted that progress in vaccinating Americans is crucial to the economic recovery efforts.
“We are in a race between the spread of more contagious variants of the virus, and reaching herd immunity with vaccinations. The economy cannot fully reopen until the virus is wrestled to its knees via a combination of vaccinations, masks, testing, tracing and therapeutics,” noted Diane Swonk, chief economist at Grant Thornton.