Jobless claims fell to the lowest levels of the pandemic era, federal data shows, signaling growing economic momentum as the pace of coronavirus vaccinations picks up.
Mark Hamrick, senior economic analyst for Bankrate, welcomed the news, especially after months of downbeat economic trends.
“A positive surprise is welcome news,” Hamrick said in an email. “Given the combination of the dynamic nature of the quickly changing conditions involving the vaccinations, the economy itself and the challenges involved with new applications, as well as the states processing and reporting them into the Labor Department, there are a lot of moving parts.”
Last week’s decline in jobless claims of 97,000 is another sign that the economic impact of the coronavirus pandemic is easing. An additional 241,745 Americans filed claims for Pandemic Unemployment Assistance, for gig and self-employed workers.
The total number of claims for all types of unemployment benefits was more than 18.9 million for the week ended March 6, according to Labor Department data.
Last week, the Federal Reserve released its most positive economic outlook in a year, projecting the unemployment rate would fall from the current 6.2 percent to 4.5 percent, and that economic growth would see its fastest pace in four decades by the end of 2021.
“It’s just a lot of people who need to get back to work, and it’s not going to happen overnight,” Fed Chair Jerome H. Powell said in a March 17 news conference, explaining that the economy still has a ways to go to catch up to pre-pandemic levels. “The faster, the better.”
The surge in new coronavirus cases and hospitalizations has slowed in recent weeks, though health officials are monitoring states that have removed mask mandates and restrictions on businesses. New cases in the United States have risen have risen 4 percent in the past week.
But Americans are still holding out hope that broad vaccine access is the key to returning to work, more job availability, and an improved economy. More than 13 percent of the U.S. population, or about 44.7 million people, had completed vaccination as of Thursday.
Hamrick pointed to the $1.9 trillion stimulus package, which included $1,400 direct payments for many Americans, and the acceleration of vaccinations and supplies to power the economic trajectory.
“There is still a massive total number of individuals receiving some form of unemployment benefit, speaking to the challenges ahead in healing the economy,” he said. “On the employment front, one key issue will be labor force participation, which took a hit during the downturn. How many individuals will begin looking for work once again?”
Martin Wegbreit, director of litigation at the Central Virginia Legal Aid Society in Richmond, said that while national trends signal progress, his caseload of clients seeking unemployment insurance has only grown in the past month.
“That’s troublesome. It really shows the persistence of the problem,” he said. “I have never seen the level of frustration and desperation than I’ve seen in the last year. And part of it is the whole system is overwhelmed and near total collapse. What used to take three or four weeks to get decided is now taking three or four months to be decided. The system was never designed for people on unemployment to have to wait that long.”
As pandemic-fueled restrictions on business operations and travel ease, economists expect Americans to step up spending in a big way, especially at hotels, restaurants, bars and retail stores.
But Wegbreit said that won’t be the reality for his clients, whom he represents in appealing rejected unemployment benefits claims.
“My clients are going to be using that $1,400 that they got or will be getting and any money they receive from unemployment just to pay basic survival needs. Rent, utilities, replacing the clunker of a car with less clunky car. Shoes for the kids,” he said. “We’re all going to be better off, but we’re still going to have the two Americas.”
