Weekly jobless claims fall to 498K, hitting new post-lockdown low

Weekly first-time claims for unemployment insurance fell below 500,000 last week for the first time since the onset of the coronavirus pandemic, according to data released Thursday by the Labor Department.

Initial applications for jobless benefits came in 498,000 in the week ending May 1, a drop of 92,000 from the previous week’s revised total of 590,000, which was initially reported at 553,000.

Last week’s sharp drop pushed weekly jobless claims to their lowest level since March 14, 2020, when millions of Americans were pushed out of work by the emerging pandemic. Weekly jobless claims peaked at 3.3 million in April and stayed within the seven-digit range through much of the year.

Jobless claims have dropped off substantially since March as accelerating COVID-19 vaccinations, federal stimulus and loosening restrictions helped fuel the rebound from the coronavirus recession.

The economy grew at an annualized rate of 6.4 percent in the first quarter of 2021, and the federal monthly jobs report, set to be released Friday, is expected to show a gain of at least 700,000 jobs in April.

The continuing decline of jobless claims may also relieve fears for some businesses that have struggled to bring back workers to meet surging demand from consumers. While some right-leaning economists say enhanced unemployment benefits may be keeping workers on the sidelines, a broader ideological range of analysts attribute the problem to continuing health concerns and school closures.

President Biden and Democratic lawmakers are hoping to turn the momentum of the recovering economy behind their push for trillions in infrastructure and social support spending. Democrats argue that it is essential to make a major investment in jobs and systems for those still struggling to rebound from the pandemic despite the national comeback.

Republicans have expressed some interest in a potential bipartisan deal focused exclusively on traditional infrastructure repairs, but have ruled out supporting most of Biden’s proposals and all of the tax increases floated to pay for them.

Updated at 9:04 a.m.