The number of Americans applying for unemployment aid fell again last week to its lowest level since the pandemic hit last year, further evidence that the job market and the broader economy are rebounding sharply from the coronavirus slowdown.
This stalled spending has created such demand for workers, especially in the restaurant and tourism businesses, that many employers are struggling to fill jobs, as the number of posted openings reached a record high. is. But many economists expect hiring to keep pace with demand in the coming months, especially as federal unemployment aid programs end and more people chase jobs.
On Friday, the government is expected to report that employers added 675,000 jobs in June, according to data provider FactSet. That would be a substantial number, but still not at a pace that would allow the economy to quickly get back to its pre-pandemic level of employment. The job market is about 7 million jobs less than that level.
Some businesses have complained that the expansion of federal aid to the unemployed — specifically a $300-a-week supplemental benefit aimed at easing the economic blow from the pandemic — has discouraged some from looking for jobs. .
But other factors are also believed to have contributed to the paucity of people looking for work again: difficulty arranging child care, fears of COVID-19, early access by older workers. Retirement, immigration slowdown and the decision by some to seek new careers instead of returning to their old jobs
Responding to criticism about a period of extended jobless benefits, dozens of states began waiving expanded federal aid starting last month: Roughly half of states would eliminate $300 payments. Most of them will also cut unemployment aid to the self-employed, gig workers and those who have been out of work for more than six months. Nationally, the $300-per-week federal benefit ends September 6.
Data firm Homebase reported that employment actually grew more slowly in states that had slashed federal benefits than those that kept it.
The recovery in the job market comes against the backdrop of a rapidly reversing economy. Growth for the April-June quarter is believed to have reached an annualized pace of around 10%. And consumer confidence almost recovered its pre-pandemic levels in May, according to an index produced by the Conference Board, a private research group.
With consumers feeling more confident about spending, the jobless claims rate, which generally reflects the pace of layoffs, has declined over the past several months. The weekly figure topped 900,000 in January, when the economy was still struggling to emerge from the recession and employers were laying off layoffs.
Despite significant improvements since then, claims remain high by historical standards. Before the pandemic decimated the economy in March 2020, the weekly figure was generally around 220,000.
All told, 3.47 million people were receiving traditional state unemployment benefits in the week of June 19, up from 3.41 million the week before. If you include federal benefits, 14.7 million were receiving some sort of unemployment assistance during the week of June 12, down from 32.1 million a year earlier.
AP Economics writer Christopher Ragber contributed to this report.