The decline in the number of Americans receiving unemployment benefits last week is another sign that the job market continues to recover rapidly from the coronavirus recession. Jobless claims plunged by 24,000 to 400,000 last week, as reported by the Labor Department.
Starting from the high of 904,000 in early January, weekly requests this year have fallen more or less steadily. But by historical standards, they are still high: before COVID hit the United States in March 2020, about 220,000 claims per week.
The job market and the wider economy have recovered from the crash in the spring of 2020. The vaccine introduced this year encourages companies to reopen or extend business hours and causes consumers to be locked up to go to restaurants, bars and shops.
Nevertheless, the health crisis is not over yet. As the highly contagious delta variant spreads among unvaccinated people, COVID-19 cases are increasing. The United States reports more than 50,000 new cases per day on average, up from less than 12,000 per day at the end of June. If the government decides to restrict business again or consumers choose to stay at home as a preventive measure, the increase in cases may have economic consequences.
However, the economy is so strong that many companies say they cannot find employees. Employers posted a record 9.2 million job vacancies in May, and the rate of job postings exceeded the rate at which applicants filled vacancies.
In response to complaints of labor shortages, 22 states decided to end the US$300 weekly federal labor benefit to alleviate the economic consequences of the pandemic. Twenty states withdrew from two other federal programs, which provided benefits for self-employed and self-employed persons. The other provided services for those who were unemployed for six months or more. The expanded plan is scheduled to expire nationwide on September 6.