Jobless Claims Drop to 3-Month Low: Has the Labor Market Turned the Corner?
New jobless claims dropped last week to the lowest level since November, the Labor Department announced Thursday, with about 730,000 people filing for benefits in state unemployment systems.
Another 451,000 applied for aid through the Pandemic Unemployment Assistance program, which provides benefits for self-employed and gig workers, bringing the total of new claims to nearly 1.2 million.
The numbers were lower than expected, leading some analysts to speculate the unemployment may be easing as vaccines are being rolled out. “The drop may be signaling a turning point for labor market conditions,” Nancy Vanden Houten of Oxford Economics said, adding that she expects “a more sustainable labour market recovery to take hold closer to mid-year with broader vaccine distribution and the arrival of more fiscal support.”
Still, some economists cautioned that bad weather in large swaths of the country may have affected last week’s numbers, and that it is too early to declare that the crisis has reached an inflection point.
“We would urge policymakers to approach the decline with a grain of salt, which is generally more than was available for the roads in Texas during its deep freeze,” wrote Joseph Brusuelas, chief economist at the consulting firm RSM. “Even with the weather-induced distortions, claims at this level are
extraordinarily elevated and merit further fiscal relief, which is working its way through Congress.”
