Weekly jobless claims fall below 500,000, setting new pandemic low

That's down 92,000 from the previous week's upwardly revised level, a bigger decrease than economists expected and the lowest figure since March 2020. The streak of declines, which started with a surprise drop in mid-April, suggests the recovery is gaining traction, pulling scores of people back into the folds of the labor market as business restrictions continue to loosen and vaccination numbers climb.

Signs of an economic rebound are abundant: Hunger, which has hovered near historic highs for much of the pandemic, is decreasing. The number of families behind on rent fell by more than 2 million in March. The S&P 500 has notched at least 21 records since President Joe Biden took office, the most seen in the first 100 days of any new administration since that of John F. Kennedy. Business optimism is bouncing back in the manufacturing and service sectors. Consumer confidence and retail sales have surged.

"A bigger than expected decline in new jobless claims is a most pleasant surprise," Mark Hamrick, a senior economic analyst at Bankrate, said Thursday in comments emailed to The Washington Post. "The healing of the job market, including reduction of unemployed and those seeking and receiving jobless aid, is as important an economic thread as any being monitored amid the reopening story."

States reported 101,214 initial claims for Pandemic Unemployment Assistance, for gig and self-employed workers, for the week that ended May 1. Nearly 7 million PUA claims were continued in mid-April for benefits that are set to expire in September.

California, Florida, New York and Virginia had the biggest decreases in first-time unemployment claims last week. Kentucky, Minnesota and New Jersey were among the only states to post increases in weekly claims greater than 1,000.

This time last year, more than 2.7 million Americans were applying for initial unemployment benefits, and the national unemployment rate ranged from 15 to 20%. At the height of the coronavirus pandemic, weekly claims surpassed 6 million.

But the rebound has cascaded unevenly through the economy, a dynamic that many economists refer to as "K-shaped" because of the diverging prospects for rich and poor Americans. Poverty rose to 11.7% in March, the highest level of the pandemic, according to research from the University of Chicago and the University of Notre Dame, with children and women being hit the hardest.

Women would need nearly 15 straight months of job gains at last month's level to recover the more than 4.6 million net jobs they have lost since February 2020, according to the National Women's Law Center. Those who are employed are experiencing greater burnout and feeling more pressure at work, according to data from McKinsey.

"How do I file for unemployment?" was the most Googled question nationwide the past year, according to research from CenturyLinkQuote.com.

Economists are looking toward Friday's monthly jobs report for a fuller employment picture. The private payroll report that ADP released Wednesday showed gains of about 742,000 positions from March to April.

"With jobless claims hitting a pandemic-era low, anticipation for the full jobs picture tomorrow mounts," Mike Loewengart, managing director of investment strategy at eTrade, said Thursday in comments emailed to The Washington Post. "Today's read is another proof point that we're one step closer to full economic recovery, sooner than some may have expected."

Employers are believed to have recovered nearly 1 million jobs across the board in April after gaining more than 900,000 the previous month. That would put the national unemployment rate in the "high 5% range," Hamrick said, a level not seen since late 2014.

But vaccinations, a key engine for the recovery, have been slowing. More than 107.3 million Americans are fully vaccinated, according to data tracked by the national Centers for Disease Control and Prevention. Biden announced a new vaccination goal on Tuesday, saying he wants 70% of adults to have received at least one dose by July 4.

Even with major gains in the labor market, there is still a long way to go before employment reaches pre-pandemic levels. More than 16 million Americans were drawing unemployment benefits across all programs in April. In 2019, average weekly initial claims hovered around 218,000.