Last week, the number of Americans applying to unemployment benefits dropped to a new low since the pandemic. This is evidence that companies are holding onto their workers and layoffs are decreasing.
According to the Labor Department, unemployment claims fell by 6,000 to 290,000. This is the third consecutive drop. This is the lowest number of people who have applied for benefits since March 14, 2019, when the pandemic grew. The pace of layoffs has been reflected in the decline in applications for jobless assistance, which have fallen steadily since January’s peak of around 900,000.
While unemployment claims are slowly returning to normal, many other aspects of job market have not yet. The past two months have seen a slowdown in hiring, despite the fact that companies and other employers have posted an almost record number of jobs. Federal Reserve Chair Jerome Powell, who is also the Federal Reserve Chair, had hoped that more people would find employment in September, as schools reopened and child care restrictions were eased. Also, increased unemployment aid was ended across the country.
But that has not happened yet. However, observers are beginning to wonder if some people who lost their jobs prior to the pandemic may have stopped looking for work permanently.
Christopher Waller, a member of Federal Reserve’s Board of Governors said Tuesday that two million of 22 million jobs that were lost due to the pandemic could not be recovered soon since retirements have increased so rapidly since COVID-19.
Thursday’s Labor Department report also revealed that the number receiving jobless assistance continues to decline. The latest data shows that 3.3 million people were receiving unemployment benefits in the week ending Oct. 2. This is down from the previous week’s 3.6 million.
Nearly 24 million people received unemployment assistance a year ago.
Two emergency programs that were established in March 2020 and which provided jobless assistance to people in need, ended in September. The first program provided assistance to self-employed workers and gig workers, who are traditionally not eligible for unemployment insurance. The second program covered those who were unemployed for more than six months. A further $300 per week in federal unemployment benefits was lost nationwide on Sept. 6.