Jobless claims fall to 385,000, nearing pre-pandemic levels

New applications for unemployment insurance dropped to 385,000 last week, according to data released Thursday by the Labor Department, setting another post-lockdown low and edging even closer to pre-pandemic levels.

In the week ending May 29, initial weekly jobless claims fell by 20,000 from the previous week’s revised total of 405,000 applications. Last week marked the lowest total of jobless claims since 225,000 applications were filed in the week ending March 14, 2020 — days before the COVID-19 pandemic derailed the economy.

The number of applications for Pandemic Unemployment Assistance, which covers workers ineligible for traditional unemployment insurance, also fell to 76,098, dropping more than 17,000 from the previous week.

After plateauing during the winter, jobless claims have dropped steadily since the end of April and have trended downward since the beginning of 2021 with a major economic rebound in sight. The U.S. has replaced roughly 8 million of the 21 million jobs lost to the onset of the pandemic and is expected to have added another 500,000 in May.

Private sector payrolls also added 978,000 jobs in May, according to the monthly ADP employment report released Thursday.