U.S. jobless claims fell last week to their lowest point in more than a year, the Labor Department said Thursday (April 15), strongly indicating that the U.S. economy, the world’s largest, is recovering from the new coronavirus epidemic and growing fast.
File photo: A steakhouse reopens in San Francisco (March 4, 2021)
The Labor Department said the number of people claiming unemployment benefits was 576,000 last week, down 193,000 from the previous week. This is the lowest point since mid-March last year and marks the second time in the past 13 months that the number of claimants has fallen below 700,000.
Weekly claims for unemployment insurance benefits in the U.S. peaked at 695,000 before the epidemic until the 1960s, and reached a peak of 6.9 million a year ago. Unemployment insurance benefit claims were averaging 218,000 per week in 2019, before the outbreak.
The outlook for the economy gives reason for continued optimism. Nearly 30 percent of U.S. adults are now fully vaccinated, and some are already hitting the gym again, eating at restaurants, and traveling on vacations, all increases in customer numbers that could lead to increased hiring.
Employers in many states are still facing orders to restrict commerce, and some governors are rescinding orders requiring people to wear masks and allowing commerce to restart across the board, or providing for an easing of restrictions on businesses sometime in the next few weeks.
President Biden’s proposed new $1.9 trillion crown bailout bill continues to permeate economic activity, which also has the potential to improve American jobs. The bill may help increase hiring and boost consumer spending, as millions of middle-income Americans are currently receiving a $1,400 stimulus check from the government.
More than three million Americans currently receive daily vaccinations, and Biden assured that all adults who wish to be vaccinated will be eligible starting this Monday. But many people may have to wait weeks for appointments, and it takes time for the vaccine to work.
More than 76 million U.S. adults have now been fully vaccinated with one of the three vaccines. As the number grows, more people will feel their lives returning to normal.
Even so, health officials say the tens of thousands of new U.S. cases each day worry them.
Employers in many states still face orders from state and municipal officials to restrict business hours or limit the number of customers served. Those returning to restaurants for the first time often find they need to sit across tables and maintain social distance to prevent the spread of the new coronavirus.
U.S. employment increased by 916,000 in March and the unemployment rate fell to 6 percent. Hiring has also increased recently, indicating that employers are looking to add employees. The Federal Reserve expects the unemployment rate to fall further to 4.5% later this year.
The Fed expects the economy to grow at 6.5 percent this year, up from its previous forecast of 4.2 percent, before dropping to 3.9 percent in 2022 and 3.5 percent in 2023.
But Federal Reserve Chairman Jerome Powell continues to be cautious about the economic outlook.
Powell said in a “60 Minutes” interview aired on CBS last weekend that the U.S. economy is “at an inflection point,” with signs of progress but still facing risks.
“There are still risks,” Powell said. “One of the main risks is that we will reopen too quickly, that people will revert to past behavior too quickly and we will see cases increase again.”
Another challenge, he said, is whether the more than eight million jobs lost in 2020 will reappear. Powell said “we’re going to have a different economy in the future than we have in the past” and that it will be tougher for some people to get back to work, especially low-income workers. Some economists expect it could take up to three years for all the lost jobs to reappear.
Under the $1.9 trillion bailout deal, the federal government will continue to pay an extra $300 a week in benefits on top of relatively less generous state unemployment insurance benefits through early September to help millions of unemployed people get back to their old jobs or find new ones.
U.S. employers have recalled millions of employees who were laid off during the 2020 business shutdown. But some hard-hit businesses have struggled to get back into business or have even closed for good, leaving employees idle or forced to find other jobs.
But the new epidemic relief measures will almost certainly breathe new life into the economy, making it easier for many employers to retain employees while they wait for the epidemic restrictions to be eased.
Johns Hopkins University says the U.S. now has the highest number of deaths and more than 31 million infections in the world, with 564,000 deaths.
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