The US Fed left its benchmark interest rate unchanged, but the bank cannot maintain an easy money policy indefinitely.
Initial claims for unemployment benefits filed with states fell to a new pandemic low in the United States last week, in yet another sign that the labour market recovery is picking up steam as increased vaccinations and generous government aid help revive consumer spending and the broader economy.
Initial jobless claims – a proxy for layoffs – fell below half a million last week to 498,000, the US Labor Department said on Thursday. That was 92,000 fewer claims than the revised level for the previous week.
Even more encouraging, the four-week moving average for jobless claims – a larger sample set that helps smooth out noise in the data – fell 61,000 from the previous week’s revised average. That was the lowest level for the four-week average since March 14, 2020.
The downward trend in weekly jobless claims comes the day before the Labor Department is set to release its closely watched monthly report on the state of the nation’s labour market.
The jobs market recovery has lagged the broader economic rebound in the US. Of the 22 million jobs lost to last year’s initial round of lockdowns, some 8.4 million have yet to be recovered, and that deficit does not take into account how much the labour force and the economy have grown since then.
And though the nationwide vaccination rate has decelerated recently, as more jabs hit more arms, it is helping to release pent-up consumer demand for goods and services, including the hardest-hit sectors of the economy like restaurants, bars and hotels.
Stimulus checks from the federal government and an extension of federal unemployment benefits are also helping US consumers recapture their pre-pandemic appetites for spending.
While most of the 50 states saw jobless claims fall, eight saw elevated levels last week, notable Kentucky, where initial claims for unemployment benefits rose by more than 4,600.
More than 16 million Americans were collecting jobless benefits from state or federal programmes for the week ending April 17, a decrease of more than 400,000 than the previous week.