About a month after the biggest cutoff to federal unemployment benefits in history, jobless claims fell to their lowest levels during the pandemic last week, a promising sign for the broader economy as the labor market continues to struggle.
About 310,000 people filed initial jobless claims in the week ending October 16, down 6,000 from the previous week and the lowest level since March 14, 2020, according to the weekly data released Thursday.
Continuing claims, a measure of the total number of individuals receiving benefits through state programs, also hit a post-Covid low, totaling about 3.3 million and falling nearly 370,000 from the previous week.
Economists were expecting about 300,000 new claims last week, according to Bloomberg data.
“All this signals that most employers don’t need or want to shed workers—it is quite the contrary with job openings remarkably high,” Bankrate senior economic analyst Mark Hamrick wrote in a Thursday morning note before cautioning: “The headwinds of supply chain congestion and high inflation threaten to make further significant job market improvement hard to come by.”
The decline in new jobless claims marks a much-needed respite for the long-struggling labor market, which posted its worst month of the year in September. The economy added back a fewer-than-expected 194,000 jobs last month, according to the Labor Department, marking a second-straight monthly decline and coming in far lower than the roughly 500,000 additions economists anticipated. “The headline jobs number was certainly disappointing—below expectations, and even below the already weak number from last month,” Brad McMillan, chief investment officer for Commonwealth Financial Network, said in an email, adding the report “raises real concerns about growth through the end of the year” because “people are still scared to go back to work” after the recent delta variant-spurred wave of the pandemic.