The U.S. recovery is accelerating after the winter slowdown.
Initial claims for unemployment insurance dropped sharply to a seasonally adjusted 576,000 in the week ended April 10 from 769,000 the prior week, which was revised up from 744,000 in the prior release. Initial claims for Pandemic Unemployment Assistance also fell on the week, to 132,000 from 152,000, and also reached the lowest since the PUA program launched last spring.
Continued claims under state programs rose 4,000 on the week to over 3.73 million in the week ended April 3 from 3.727 million a week earlier, which was revised down from 3.734 million in the prior release. Workers claimed over 16.93 million weeks from all unemployment programs in the week ended March 27, down from nearly 18.17 a week earlier, and also marking a recovery-to-date low.
Consumer demand is strong, supported by fiscal stimulus and low interest rates; the buoyant stock market is boosting wealth and spending power for households who own stocks. With the vaccination drive fueling a reopening of high-contact sectors of the economy, businesses are rehiring workers laid off earlier in the downturn, and making fewer new layoffs too. Unemployment remains very elevated — the 17 million weeks claimed under all UI programs at the end of March was 5 million more than in the worst week of the 2008-09 Great Recession’s joblessness.
The pandemic is interfering with the normal functioning of the jobs market. April 15’s claims data show unemployment is still very high, while business surveys like the ISM PMIs report employers are having a hard time filling open positions. Caregiving responsibilities, more generous unemployment benefits, and health concerns are slowing the return of unemployed Americans to jobs. The March jobs report (released April 2 by the Bureau of Labor Statistics; different from the weekly claims report published today) showed 4 million people “were prevented from looking for work due to the pandemic.” As the pandemic comes further under control, people will re-enter the labor force, and raise the supply of goods and services the U.S. economy produces, absorbing the demand from stimulus.