U.S. jobless claims fall to a new pandemic low amid speedy vaccination rollout

The number of U.S. state unemployment insurance claims dropped at the lowest last week since the coronavirus pandemic hit last spring, signaling US economic recovery has increased as governments loosen industry and trade controls.  

The number of workers applying for unemployment insurance fell to 547,000 last week.

The Labor Department said Thursday that initial unemployment claims, a proxy for layoffs, dropped 39,000 last week from an upwardly revised 586,000 the prior week. This resulted in seasonally adjusted new claims falling below 600,000 for two weeks in a row in mid-April, the lowest level since early 2020.

While claims appear to be higher than the pre-pandemic average of around 220,000, economists expect to fall as the recovery accelerates.

The reduction in the number of claims demonstrates that the workforce is continuing to grow as Americans get vaccinated more and companies are hiring for the position which was empty due to the pandemic.

Despite the decrease in unemployment, the stabilization of labor markets is far from recovery as weekly claims remain substantially higher than pre-pandemic peaks.

Economists polled by The Wall Street Journal in April predicted that the United States' GDP will grow at a 5.59 % annual pace in the first quarter of 2021. This was higher than the January survey's average estimate of a 2.21 % raise.

Rapid vaccine rollouts in the United States have accelerated the speed of economic growth, boosted public morale, and provided a strong start to the first-quarter earnings season. The United States' economy will rise at its highest annual rate in decades this year, outperforming most of its major peers, according to a Reuters survey, 

At 8:43 a.m. ET, Dow e-minis were down 4 points, or 0.01 %, S&P 500 e-minis were up 0.5 points, or 0.01 %, and Nasdaq 100 e-minis were down 6.5 points, or 0.05 %.Picture

Picture Credits: WSJ