The number of new applications for unemployment benefits dropped 20,000 last week to 385,000, the Labor Department reported on Thursday, a new pandemic low.
The number of new jobless claims represents the number of people who filed for unemployment in the previous week. The figure ended up beating forecasters’ expectations of 390,000 new claims. The number is also lower than the week prior, which logged 406,000 filings.
The numbers come as economists closely watch how the economy is rebounding from the COVID-19 pandemic and at what rate people are returning to the labor force. Some economists worry there is a labor shortage and fear the economy is heating up too much from pent-up demand, the easy money policies of the Federal Reserve, and high levels of federal spending.
JOB SEARCHES UP IN STATES THAT OPTED OUT OF JOE BIDEN’S UNEMPLOYMENT BENEFITS
Against the backdrop of the potential labor shortage, several Republican-led states, about half of the country, have decided to opt out of the federal expanded unemployment program that was implemented to bolster state unemployment payments during the pandemic.
While the expanded program, which gives the unemployed $300 per week on top of whatever states already provide, is scheduled to sunset in September, the governors of states that are ending the program early hope that doing so will encourage people to fill a glut of job openings.
Some employers, especially those with lower-wage workers, have complained that because of the expanded unemployment program, potential employees are steering clear of certain jobs because they can make more collecting the benefits. Some companies have been forced to increase wages and benefits in order to be competitive.
A recent study by employment website Indeed found that job search activity rose, relative to the national trend, in the roughly two dozen states that announced early ends to the expanded unemployment program. The study found that a state’s share of national clicks, on average, was up between 3% and 4% from the day of the announcement to three days later.
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Despite the findings of search activity, it is still unclear how big of an effect states’ anticipated exits from the federal program are directly having on the number of people now entering the job market.
