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Jobless claims fall by more than expected, hit fresh pandemic low at 444,000

·Editor focused on markets and the economy
·2 min read

Workers filing for new unemployment benefits fell to a new pandemic-era low in the latest week, hitting their lowest levels in more than a year as the labor market continued to heal from the worst days of the COVID-19 outbreak. 

The Department of Labor released its weekly report on new jobless claims Thursday at 8:30 a.m. ET. Here were the main metrics expected from the report, compared to consensus data compiled by Bloomberg:

  • Initial jobless claims, week ended May 15: 444,000 vs. 450,000 expected and an upwardly revised 478,000 during prior week

  • Continuing claims, week ended May 8: 3.751 million vs. 3.62 million expected and 3.655 million during prior week

Thursday's data was the lowest level for initial claims since March 2020, when the data checked in at 256,000, according to Labor Department data. Since the beginning of the year, weekly jobless claims have tumbled by nearly half, and have fallen precipitously from their pandemic-era peak of more than 6 million last year. 

The Labor Department said weekly unemployment claims are at their lowest levels in more than a year.
The Labor Department said weekly unemployment claims are at their lowest levels in more than a year.

The 4-week moving average was 504,750, tumbling by over 30,000 from the previous week and also the weakest level since March 14, 2020, with the previous week's number revised up slightly, to 535,250.

Steady improvement over the last several months — amplified by the COVID-19 mass vaccination effort and the relaxation of lockdowns across the country, have created more positions while sparking an increasingly acute labor shortage. 

Companies have had to hike wages in order to entice badly needed workers as demand surges, stoking a furious debate over supplemental unemployment benefits that critics contend have become a barrier to hiring.

Prior to the pandemic, new jobless claims averaged just over 200,000 per week throughout 2019.

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"What a journey [this] has been," said Mark Hamrick, senior economic analyst at Bankrate. 

"Economic momentum is now sufficiently robust as to be the source of reopening strains, compared to the pandemic-caused loss of activity experienced a year ago. Even so, the disappointing April payrolls picture has, at the very least, prompted a re-assessment and questioning whether matching millions of available jobs with the unemployed is more difficult than imagined."

Last month, employers created a robust 266,000 jobs — but that figure was far below Wall Street's aggressive estimates. The disappointing figure tempered expectations over the U.S. rebound, and also led to a reassessment of how generous unemployment may have created a shortage of labor.

Javier David is an editor for Yahoo Finance. Follow Javier on Twitter: @TeflonGeek

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