The number of workers applying for first-time jobless aid is falling for the first time in a month, indicating the U.S. job market is resuming its steady recovery.
Some 326,000 people filed first-time unemployment claims last week, the Labor Department said Thursday. That’s 38,000 fewer than the previous week, and the first drop after three weeks of steady increases.
After hitting a pandemic low of 312,000 in early September, claims had risen for three straight weeks, suggesting that the highly contagious Delta variant and hurricanes slamming the Gulf Coast were temporarily disrupting a recovery in jobs.
“With Delta infections dropping rapidly and hurricane effects mostly finished, we should resume the path toward normal levels of weekly layoffs,” Robert Frick, corporate economist at the Navy Federal Credit Union, said in a note.
Since surpassing 900,000 in early January, the weekly applications, considered a proxy for layoffs, have fallen more or less steadily, but remain elevated from pre-pandemic levels, when weekly claims hovered between 200,000 and 250,000.
The job market has been rebounding with surprising strength since mid-2020. Employers, forced to shut down or restrict hours as a health precaution, slashed more than 22 million jobs in March and April last year. But massive aid from the federal government and the rollout of vaccines has supported an economic recovery, providing consumers with the financial wherewithal to spend and confidence in safety to return to restaurants, bars, shops and workplaces.
So far this year, employers have been adding 586,000 jobs a month, and the latest monthly employment report, due Friday, is expected to show they tacked on about 490,000 more jobs in September, according to a survey of economists by the data firm FactSet.
Still, even with 5 million fewer Americans on payrolls today than before the pandemic, companies are now complaining they can’t find workers fast enough. Job openings surged to a record.
Altogether, 2.7 million Americans were receiving some type of jobless aid the week of September 25. In early September, the federal government— including $300 a week on top of traditional state benefits — that was meant to ease the economic impact of the pandemic.