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Unemployment claims fell sharply last week

A tractor-trailer rig pulled into a terminal for a trucking company that has a $10,000 hiring bonus offer posted on a trailer at their facility in Harmony, Pa., on Wednesday. Many employers are having trouble finding workers, with some blaming enhanced unemployment benefits for discouraging people from returning to work
A tractor-trailer rig pulled into a terminal for a trucking company that has a $10,000 hiring bonus offer posted on a trailer at their facility in Harmony, Pa., on Wednesday. Many employers are having trouble finding workers, with some blaming enhanced unemployment benefits for discouraging people from returning to workKeith Srakocic/Associated Press

Unemployment filings fell again last week as the improving public health situation and the easing of pandemic-related restrictions allowed the labor market to continue its gradual return to normal.

About 505,000 people filed first-time applications for state jobless benefits, the Labor Department said Thursday, down more than 100,000 from a week earlier. In addition, 101,000 people filed for Pandemic Unemployment Assistance, a federal program covering freelancers, self-employed workers, and others who don’t qualify for regular benefits. Neither figure is seasonally adjusted.

In Massachusetts, for the second week in a row, state officials said that due to a “system processing error,” initial claims data for regular unemployment benefits for last week and the week prior are “estimated values” based on data reported to the Employment and Training Administration. The state said the corrected values will be provided when they are available.

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Based on that data, about 11,500 individuals filed new claims for unemployment benefits in Massachusetts last week, down about 3,000 from the week prior. The Baker administration said the decrease was primarily due to schools resuming classes after spring vacation week, which the week before had caused a slight uptick driven by the transportation and warehouse sector, which includes bus drivers.

Last week, there was a decrease in the number of Massachusetts residents filing for aid under the Pandemic Unemployment Assistance program. There were about 1,400 initial PUA claims, down by about 180, marking the fourth consecutive week of decreases.

Although new applications for aid continue to trend downward, after eight weeks of decline, continued claims in Massachusetts increased by about 450 last week to 90,500. PUA continued claims increased by about 550 to nearly 250,000. An additional 9,000 individuals filed claims under extended benefits programs, which provides aid to those who exhausted traditional aid but are still out of work, down slightly from the week prior.

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Nationwide, applications for unemployment benefits remain high by historical standards, but they have fallen significantly in recent weeks after progress stalled in the fall and winter. Weekly filings for state benefits, which peaked at more than 6 million last spring, fell below 700,000 for the first time in late March and has now been below that level for four straight weeks.

“In the last few weeks we’ve seen a pretty dramatic improvement in the claims data, and I think that does signal that there’s been an acceleration in the labor market recovery in April,” said Daniel Zhao, senior economist at the employment site Glassdoor.

There were still more than 9 million people receiving unemployment insurance under state programs — or emergency programs that extend state benefits — as of mid-April, the latest data available. That total, which does not include workers on Pandemic Unemployment Assistance, has fallen in recent weeks, but more slowly than new applications. At the peak of the crisis last spring, more than 20 million people were receiving benefits.

Economists should get a clearer picture of the labor market’s progress on Friday when the Labor Department will release data on hiring and unemployment in April. The report is expected to show that employers added about 1 million jobs last month, up from 916,000 in March. The leisure and hospitality industry, which was hit the hardest by the initial phase of the pandemic last spring, has led the way in the recovery in recent months, a trend that forecasters believe continued in April.

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Even strong job growth last month will still leave the US economy with millions fewer jobs than before the pandemic. Forecasters expect the report to show that the unemployment rate fell below 6 percent in April, down from nearly 15 percent last spring. But that doesn’t factor in people — particularly women — who have left the labor force, including those caring for children while schools are closed. If those people were counted as unemployed, the jobless rate would have been above 9 percent in March, and most likely close to that level in April.

Many employers have said in recent weeks that they would like to hire even faster but have struggled to find enough workers. Some have blamed enhanced unemployment benefits for discouraging people from returning to work. On Tuesday, Governor Greg Gianforte of Montana said his state would pull out of a federal program offering enhanced benefits to unemployed workers and would instead pay a $1,200 bonus to recipients when they find new jobs.

Economic research has found that unemployment benefits can reduce the intensity with which workers search for jobs. But most studies find that the impact on the overall labor market is small, especially when unemployment is high. And Zhao and other economists say there are other reasons that labor supply might be rebounding more slowly than demand. Many potential workers are juggling child care or other responsibilities at home; others remain cautious about the health risks of returning to in-person work.

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“I think we will see labor supply improve pretty dramatically in the coming months as the pandemic abates,” Zhao said.