In an aerial view, San Francisco Department of Public Works workers repair a section of 24th Avenue in San Francisco, California on April 8, 2021.
Justin Sullivan | Getty Images
Weekly jobless claims fell to new lows in the pandemic for a second week, suggesting that the labor market recovery is picking up pace and April’s employment report could be strong.
Initial filings for the week ended April 17 totaled 547,000, about 50,000 fewer than forecast. The week is also the same that the government collects data for April’s employment report.
“In general, I think this is consistent with bolstering the job market. It feels like things are really starting to crash here,” said Kevin Cummins, chief economist, NatWest Markets in the US. Cummins noted that the April paycheck, due May 7, could be the same or even better than March’s 916,000 paycheck.
Some economists have said the hiring momentum could push job creation to over 1 million this month.
“A million seems like a reasonable number,” said Cummins. “I don’t have an exact estimate yet, though. This year we have a total model of 525,000 jobs per month, and that might be too conservative.”
Thursday’s report is the second in a row that claims have been below 600,000. The entitlements for the week ending April 10 have been revised by 10,000 to 586,000. This is in sharp contrast to a year ago when claims peaked at 6.2 million in early April. The previous high was 695,000 in October 1982.
Persistent claims for the week of April 10 also fell 34,000 to 3.67 million, also a pandemic low. There are still 17.4 million people receiving benefits under various programs, but data from these programs are lagging and two weeks behind ongoing entitlement data.
“We should see several months of very strong numbers,” said Grant Thornton chief economist Diane Swonk. “We should hack away. The momentum has increased. No question about it. It’s a ramp.”
There are some concerns that increased unemployment benefits are preventing some workers from getting back into work, but Swonk said the pandemic created unique problems for the job market.
“Job postings have increased quite dramatically. The job search has not been that high. This partly reflects the reluctance of people to return to work before they are fully vaccinated,” she said. Swonk also said that many parents cannot leave school-age children, many of whom continue to attend classes remotely.
According to NatWest’s Cummins, damage data is not as reliable an indicator as it was before the pandemic. For example, states use different criteria and the data was “noisy”.
“I think you’re looking at a lot of things, like the beige book,” he said, referring to the monthly report on the economy published by the Federal Reserve. “The anecdotal reports there have been very good. It really feels like the job market has been really good and it’s only going to get better.”
Bonds and stocks did not respond to the ET claims report at 8:30 a.m. Thursday. Bond yields were flat along with stocks.
“The data now confirms the optimism that has been priced into the market,” said Patrick Leary, Incapital’s chief market strategist.
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FIX: The ongoing claims for the week of April 10th also decreased by 34,000 to 3.67 million. In an earlier version, the date was incorrectly specified.