Washington (AP) — The number of Americans applying for unemployment benefits plummeted to 576,000 last week. This is the lowest post-COVID value and a sign of hope that furloughs will be eased as the economy recovers from the pandemic recession.
Ministry of Labor Said Thursday that the application plummeted From 769,000 to 193,000 revised a week ago. Unemployed billing has now dropped significantly from its peak of 900,000 in early January, well below the level of more than 700,000 who have been stuck for months.
Decreased unemployment claims are accelerating vaccinations, lifting restrictions on pandemic business in many states, and more and more Americans wanting to travel, shop, eat out, and otherwise spend again. As it looks, it is consistent with other evidence that the economy is strengthening. In March, employers added 916,000 healthy jobs, the highest since August, and the unemployment rate fell to 6%, less than half of the pandemic peak of 14.8%.
For the week leading up to March 27, unemployment allowances were reduced from 18.2 million last week to 16.9 million. The decline suggests that some of the unemployed are being brought back to work.
Still, the still high number of continuous recipients means that even if the economy improves in the last few weeks, millions of people will face unemployment and loss of income, struggling to pay bills and rent. Indicates that you are doing. When the last unemployment rate was so low, weekly billing was around 350,000, well below current levels.
Economists point out various potential explanations. Some states are still struggling to clear the application backlog from the previous week. As a result, the currently reported unemployed claims may result from a temporary dismissal that occurred a few weeks ago. Other states are also faced with their suspicion of a significant number of fraudulent claims for unemployment assistance.
Another possible factor is that under President Joe Biden’s $ 1.9 trillion relief package, the federal government will give a weekly unemployment allowance of $ 300 a week until September (in addition to the state’s average unemployment allowance of about $ 340). It is a supplement. That extra money may encourage more people to seek unemployment assistance.
Still, not all unemployment applications have been approved. The government reports weekly how many people have applied for help, but not the number of people who actually received help. If the applicant does not earn enough money to qualify, is dismissed, or quits his job, the claim will be denied. Unemployment assistance is intended for people who have been dismissed without their own negligence.
Michael Feroli, an economist at JPMorgan Chase, found that the percentage of approved unemployment claims plummeted in the winter months. For example, in February, Feroli found that less than 25% of applications were approved and paid. This is down from the long-term average of about 45%. This suggests that current levels of unemployment insurance have artificially increased as more Americans seek benefits due to higher payments, even if they are not actually eligible.
Most analysts are bullish on the outlook for the economy in the coming months.They include Federal Reserve Chairman Jerome Powell, who expressed his beliefs in his final appearance. “60 minutes” Sunday The economy is at the “inflection point” and appears to be ready for the boom.
“We feel like we are in a place where the economy is starting to grow much faster and job creation is coming much faster,” Powell said. “This growth expected in the second half of this year will be very strong, and job creation, I expect it to be very strong.”
In fact, many economists are concerned about the potential surge in inflation that results from stagnant consumer demand. Prices for wood, copper, oil and other raw materials are already rising due to the surge in demand for gas, housing and electronics.
Consumer price index rise 0.6% in March, The most common since 2012, the government reported Tuesday, an increase of 2.6% over the past year. However, excluding the unstable food and energy categories, prices rose 1.6% year-on-year.
Inflation is likely to recover in the coming months, Powell said, but price increases will probably ease as the pandemic-induced supply chain disruption in many industries disappears. ..