The number of Americans seeking new unemployment benefits continued a steady week-over-week decline, falling below a half million and hitting another pandemic low, the feds said Thursday.
Initial worker filings for jobless claims, seen as a signal of layoffs, reached 473,000 last week, down from a revised total of 507,000 reported the prior week, according to data released Thursday by the Labor Department.
The overall number of people on government assistance remained high, with over 16.8 million claiming continuing assistance, the feds said Thursday.
Despite signs that COVID-19 vaccinations, government stimulus and easing restrictions on businesses are helping to kickstart the economy, hiring has remained surprisingly low. The US added just 266,000 jobs in April, the feds said last week, far below economists’ expectations of 1 million.
With layoffs continuing to slow and job openings at record levels, many economists expect a hiring boom in the months ahead.
Companies across industries and increasingly more economists have blamed the US’ hiring woes on pandemic-boosted unemployment benefits, which include an extra $300 a week. Economists have also said fear of COVID-19 and child-care duties due to shuttered schools are likely sidelining some of the workforce, as well.
But the labor shortage could hold back the US economic recovery this spring and summer if hiring doesn’t pick up, economists have warned.
A number of major US employers, including Chipotle and Amazon, have announced pay hikes as they compete for workers with government stimulus.
Some states have announced plans to eliminate the extra unemployment benefits sooner than they need to in order to encourage workers to return to take new jobs.
Republican governors of at least nine states including Arkansas, Montana and South Carolina recently said they would prematurely end the additional benefits for their constituents to help struggling employers in their states.
President Biden has defended the enhanced benefits, saying that people can’t turn down good jobs and keep collecting benefits.