CHICAGO (NewsNation Now) — The number of Americans applying for unemployment benefits has reached its lowest level since the pandemic struck last year, further evidence that the U.S. economy and job market are quickly rebounding from the pandemic recession.
The Labor Department said Thursday that jobless claims decreased by 26,000 from the previous week to 360,000. Weekly applications, which generally track the pace of layoffs, have fallen steadily this year from more than 900,000 at the start of the year.
Claims have dropped from a record 6.149 million in early April 2020 but are still above the 200,000-250,000 range that is viewed as consistent with a healthy labor market. The number of continued claims dropped 126,000 to 3.24 million.
The U.S. recovery from the recession is proceeding so quickly that many forecasters have predicted that the economy will expand this year by roughly 7%. That would be the most robust calendar-year growth since 1984.
“The current situation with the U.S. economy is truly remarkable,” said Mark Hamrick, senior economic analyst at Bankrate. “It features what will likely be the strongest annual growth in decades, but currently with a still heightened level of unemployment.”
The rollout of COVID-19 vaccines has sharply reduced new viral cases — from a seven-day average of around 250,000 in early January to roughly 25,000 recently — despite a recent uptick. As the health crisis has receded, cooped-up Americans have increasingly emerged from their homes, eager to spend on things they had missed during pandemic lockdowns — dinners out, a round of drinks, sports and entertainment events, vacation getaways and shopping trips.
In response, businesses have scrambled to meet the unexpected surge in customer demand: They are posting job openings — a record 9.2 million in May — faster than they can fill them. The worker shortage in many industries is causing employers to raise wages and, in some cases, to raise prices to offset their higher labor costs.
“The reopening of the economy has created remarkable demand for workers across a wide variety of categories,” Hamrick said. “Another reopening strain, the question of inflation, whether it persists, is essentially the top economic issue of the moment.”
In June, employers added a strong 850,000 jobs, and hourly pay rose a solid 3.6% compared with a year ago, faster than the pre-pandemic annual pace and a sign that companies are being compelled to pay more to attract and keep workers.
The Associated Press and Reuters contributed to this report.
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