Weekly jobless claims fall below 300,000 for first time amid pandemic

The 36,000 drop brought the weekly count to 293,000 and strikingly close to the pre-pandemic mark of 256,000. The four-week moving average fell by 10,500 to 334,250, its lowest level since March 2020.

The new numbers reflect an economy that has improved significantly from the pandemic-imposed doldrums of 2020, but remains racked by supply-chain bottlenecks, labor shortages and the coronavirus, which saw a resurgence this summer as the highly contagious delta variant took hold.

The White House lauded Thursday's report as more progress on the heels of September jobs data showing the U.S. unemployment rate fell from 5.2% to 4.8%.

"With wages rising and our unemployment rate back below 5% for the first time since the pandemic struck, it is clear that our economy is getting back to normal despite the global challenges posed by the delta variant, President Joe Biden said in a prepared statement.

But the September report also revealed tepid job growth - just 194,000 positions were added, well below the 500,000 expected - and that the lower unemployment rate was partly due to the large number of people - primarily women - who left the labor force. Lingering safety concerns about the coronavirus, child-care worries, burnout and other factors are keeping many workers on the sidelines.

Still, having the weekly number fall below 300,000 is a key psychological threshold. Daniel Zhao, lead data scientist on Glassdoor's economic research team, predicted on Twitter that the pre-pandemic low "could be reached later this year as the delta wave recedes and hiring improves." Rep. Ted Lieu, D-Calif., tweeted that the jobless claims numbers show the country is "on the right track."

The report added to the feel-good vibe on Wall Street, where strong earnings results from big banks lifted investors' economic outlook. The Dow Jones industrial average jumped 534.75 points, or 1.6%, to close at 34,912.56. The S&P 500 added 74.46 points, or 1.7%, to settle at 4,438.26. The tech-heavy Nasdaq surged 251.79 points, or 1.7%, to end the session at 14,823.43.

Biden underscored the connection between coronavirus vaccination rates and the economy in his statement Thursday, noting that "we cannot fully bring our economy back unless we beat the pandemic."

As vaccination requirements have gone into effect, he said, more Americans are getting coronavirus shots. Some 66 million people remain unvaccinated in the United States, compared with nearly 100 million in July. "We are making important progress against the delta variant, and our economy is gaining strength in turn," Biden said.

Labor Secretary Marty Walsh said the last several Bureau of Labor Statistic reports show that the U.S. is still grappling with the pandemic-related head winds.

"I think we're seeing people still living with the concern and maybe fear of the pandemic. Maybe their health is not necessarily the best and then they're worried about their personal health," Walsh told the Chicago Tribune.

Betsey Stevenson, an economist at University of Michigan, told CNBC that most economists "feel very comfortable saying that we're going to see better news in the October jobs report than we did in the September jobs report, and these unemployment insurance claims numbers that we're seeing today supports that idea."

In March and April of 2020, more than 20 million U.S. workers lost their jobs ― at one point totaling more than a million a day ― as pandemic-inflicted closures took their toll on the country's service-centric economy. In the 18 months since, the jobless ranks have shrunk significantly.

But the biggest economic driver of the labor market appears to be workers' own decisions to leave their jobs. Americans are quitting their jobs at historically high rates, as about 4.3 million left their jobs in August, according to Labor Department data reported Tuesday. That makes about 2.9% of the total U.S. workforce.