The number of Americans seeking unemployment benefits dropped to 406,000 last week, with a new epidemic decreasing and more evidence that the job market is strengthening as the virus outbreak and the economy reopen
WASHINGTON – The number of Americans seeking unemployment benefits dropped to 406,000 last week, with a new epidemic looming and more evidence that the job market is strengthening as the virus takes over and the economy reopens.
Thursday’s report from the Department of Labor showed that applications dropped by 38,000 from 444,000 a week earlier. The number of weekly applications for unemployed aid – a rough measure of layoff speed – has fallen by more than half since January.
The decline in applications reflects a rapid rebound in economic growth. More Americans are venturing out to shop, travel, dine, and congregate at entertainment venues. All of the renewed spending has prompted companies to look for new employees, which helps explain why a record number of jobs are now being advertised.
Yet many businesses complain that they are not getting enough applicants for all those open jobs, even though the unemployment rate remains at 6.1%, up from the 3.5% rate before the epidemic in March of last year. Job growth declined sharply last month compared to March, a surprise return that was largely attributed to labor shortages in some industries.
Economists blame a number of factors for the shortage of workers, including an additional $ 300-a-week payment that those receiving unemployed aid have been able to receive at the top of their state unemployment checks since March . The federal benefit was included in President Joe Biden’s $ 1.9 trillion rescue package. Some analysts say that while many are able to earn more from their combined federal and state jobless aid than their previous jobs, the extra income has discouraged some unemployed from seeking work.
Others hesitate to work in restaurants, hotels and other service industries for fear of contracting COVID-19. And some women cannot return to work without adequate childcare, although recent research by two economists found the impact of this factor to be relatively small.
Complaints from businesses that they are not getting enough staff have prompted most Republican governors to reduce unemployment aid. Twenty-four states with populations such as Texas, Florida, Georgia and Arizona have said they will stop paying the supplementary $ 300-a-week federal unemployed payments beginning in June.
Twenty of them states that they will stop participating in two emergency programs. One of those programs involves self-employed and gig workers. The second provides assistance to those who have been unemployed for more than six months. The cutoff of those two programs could cost at least 2.5 million people for all their unemployed assistance.