498,000 Americans filed for unemployment benefits last week (figure below).
It was the first time initial claims dropped below the half-million mark since the onset of the crisis. Consensus expected 538,000. The range, from 42 economists, was 500,000 to 600,000. The previous week’s figure was revised higher.
The four-week moving average fell to 560,000, well below the pre-pandemic record high set decades ago.
Continuing claims for the week ended April 24 were 3.69 million, slightly more than the 3.62 million estimate.
Although the upward revision to the previous week’s initial claims headline makes things appear a bit more choppy, the trajectory is clear enough. The labor market is on the mend. And while this is impossible to quantify with any degree of precision, it doesn’t appear that generous unemployment benefits are discouraging Americans from returning to work when given the opportunity.
Initial Pandemic Unemployment Assistance claims fell 20,200 in the week through May 1. Ongoing PUA and PEUC claims were 6,862,705 and 4,972,507, respectively, in the week of April 17.
Thursday’s claims data came sandwiched between an upbeat (albeit slightly below-consensus) read on ADP and Friday’s nonfarm payrolls report, which some expected to show the US added in excess of 1 million jobs in April. If consensus is close, it would mean the US has added more than 2.5 million jobs so far in 2021 (figure below).
At the risk of speaking too soon, the US economy appears to be on the brink of normalizing. Yes, there are still more than 8 million jobs MIA (likely closer to 7 million after Friday’s NFP report). But in the absence of some new stumbling block, labor market slack should be absorbed relatively quickly. When you consider that in conjunction with Americans’ propensity to spend, and the excess savings accumulated over the course of the pandemic, the summer “boom” thesis seems intact.
Joe Biden this week announced an even more aggressive approach to vaccinations, with a plan to encourage pharmacies to give shots to walk-ins. On Wednesday, New York said you can get vaccinated at a Yankees game, where admission will be free with your jab.
Of course, nothing is certain in life. And if you’re looking for what could go wrong, you might nervously eye India, although the comparison to the US, where a third of the population is now fully vaccinated, is apples to oranges.
First off should be gratitude to all the scientists and biologist that made this possible.
The medical community and therapies they have come up with along with all the supply lines that finally got in place, has made this easier to bear.
We may yet stumble but politics seem to be the only thing that’s going to make us fall down.