Written by Norman Isaac Mwambazi

Unemployment claims fall to new pandemic low of 406,000, but there are claims some people don’t want to go back to work

Summary Unemployment claims fall to pandemic low. Claims still above more than pre-pandemic days. Washington state, Florida, among states with …


  • Unemployment claims fall to pandemic low.
  • Claims still above more than pre-pandemic days.
  • Washington state, Florida, among states with the highest decline.
  • Labour Department says numbers might have been inflated

The numbers

New applications for regular unemployment benefits fell in late May for the fourth week in a row as the U.S. economic recovery from the waning coronavirus pandemic induced companies to hire more workers.

Initial jobless claims dropped 38,000 to 406,000 in the week that ended on Saturday May 22, the government said Thursday. That is the fewest number of requests for compensation since the onset of the pandemic nearly 15 months ago and it beat expectations by economists who, according to a survey by Dow Jones and The Wall Street Journal, had forecast new claims to fall to a seasonally adjusted 425,000.

This new number of requests for compensation are down more than half of what it was in early January, standing at as high as 900,000. However, it is still more than double it was before the COVID-19 pandemic, as it stood at over 200,000 then.

There have been complaints by some employers and politicians alike that generous unemployment benefits have discouraged people from taking jobs. This argument has swayed almost half of the U.S. states to end extra federal payouts starting late next month.

Supporters of the extra benefits counter that many people, particularly women, are still stuck having to care for children or elderly parents because of the pandemic. They warn cutting off benefits will cause more hardship and slow the recovery.

Whatever the case, analysts are confident that the U.S. economy still has enough momentum to ensure fairly strong growth over the summer.

Here are the states with the most decline in unemployment claims

  • Washington state,
  • Florida,
  • New Jersey,
  • Texas
  • Ohio.

The only U.S. state to post a sizable increase in unemployment claims in May was Oklahoma.

Another 93,546 applications for jobless benefits were filed last week through a temporary federal relief program. This number shouldn’t alarm you though, because it is way belo last year’s peak, which was well over 1 million a week. So this is new a pandemic low.

The number of people already collecting state jobless benefits, meanwhile, fell by 96,000 to a seasonally adjusted 3.64 million in the week ended May 15. These are known as continuing claims. Some 5.2 million people who have exhausted state compensation were also getting extra federal benefits. The federal program ends in September.

As of May 8, 2021, the total number of people that were reportedly receiving benefits from eight separate state and federal programs was 15.8 million. Still, this is just a little bit more than half of what this number was, having stood at over 30 million early in the pandemic era. It is worth noting that less than 2 million people were getting unemployment benefits before the pandemic erupted.

Inflated numbers

There is a possibility that the total number of people claiming unemployment benefits are even less than the reported 15.8 million. This is after the Labour Department said in a review, that the number of distinct individuals collecting benefits has been inflated by widespread fraud and double counting which has resulted in tens of billions of dollars lost in improper payments.

“Fewer Americans are getting laid off as COVID-19 levels drop, and many employers are now worried about finding and keeping workers. At current rates, we should see normal claims numbers of about 200,000 weekly sometime this summer,” said Navy Federal Credit Union corporate economist Robert Frick.

Market reaction

The Dow Jones Industrial Average and the benchmark S&P 500 opened slightly higher in Thursday trades.