Unemployment claims hit lowest level since pandemic
The number of Americans applying for unemployment benefits tumbled last week to 576,000, a post-COVID low and a hopeful sign that layoffs are easing as the economy recovers from the pandemic recession.
The Labor Department said Thursday that applications plummeted by 193,000 from a revised 769,000 a week earlier. Jobless claims are now down sharply from a peak of 900,000 in early January.
For the week ending March 27, 16.9 million people were continuing to collect jobless benefits, down from 18.2 million in the previous week. Those figures make clear that even as the economy has strengthened in recent weeks, millions are facing a loss of a job or income and have been struggling to pay bills or rent.
The drop in claims comes after employers adding 916,000 jobs in March, the most since August, in a sign that a sustained recovery is taking hold as vaccinations accelerate, pandemic business restrictions are lifted in many states and Americans appear increasingly willing to travel, shop, eat out and otherwise spend again. The unemployment rate fell to 6%, from 6.2%, less than half the pandemic peak of nearly 15%.
The nation’s unemployment rate has declined steadily, from a high of 14.8% a year ago to 6%. The last time the jobless rate was this low, weekly claims were around 350,000, still well below their current level.
Economists point to a range of potential explanations for the discrepancy. For one thing, many states are still struggling to clear backlogs of applications from previous weeks. As a result, jobless claims being reported now may stem from layoffs that occurred weeks ago. Some states are also facing what they suspect is a sizable number of fraudulent claims for unemployment aid.
Another possible factor is that under President Joe Biden’s $1.9 trillion rescue package, the federal government is now supplementing weekly jobless benefits by $300 a week — on top of the average state unemployment payment of about $340 — through September. That extra money may be encouraging more people to request unemployment aid.
Still, not all unemployment applications are approved. The government reports each week on how many people have applied for aid — but not how many have actually received it. Claims are rejected if the applicants hadn’t earned enough money to qualify or had been fired or quit their jobs. Unemployment aid is intended for people who have been laid off through no fault of their own.
Most analysts have grown bullish about the economy’s prospects for the coming months. They include Federal Reserve Chair
Jerome Powell, who expressed his belief in an appearance last Sunday on “60 Minutes” that the economy is at “an inflection point” appears poised for a boom.
“We feel like we’re at a place where the economy’s about to start growing much more quickly and job creation coming in much more quickly,” Powell said. “This growth that we’re expecting in the second half of this year is going to be very strong. And job creation, I would expect to be very strong.”
Many economists, in fact, are concerned more about a potential burst of inflation stemming from the unleashing of pent-up consumer demand. Prices for lumber, copper, oil and other raw materials have already risen as demand for gas, homes and electronic equipment has jumped.
Consumer prices rose 0.6% in March, the most since 2012, the government reported Tuesday, and are up 2.6% in the past year. Excluding the volatile food and energy categories, though, prices rose by a more benign 1.6% year over year.
Powell has said that while inflation will likely pick up in the coming months, the price increases will probably ease as the pandemic-induced disruptions in many industries’ supply chains are worked out.
COVID-19 Economy FAQs
Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?
This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.
Could waiving patents increase the global supply of COVID-19 vaccines?
India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
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