The nation is heading in the right direction with steady gains in employment. Last month, the U.S. ... [+]
In a shot of good news, jobless claims reached another pandemic low, as only 547,000 claims were made last week, according to the United States Department of Labor Thursday. The numbers, out of context, could look large. To put the data into perspective, weekly jobs claims hit 900,000 in January. About 6.2 million Americans filed for unemployment benefits in April 2020. Relative to the dark early days of the Covid-19 outbreak, the recent report shows massive layoffs have subsided and the labor market is getting stronger.
Mark Hamrick, senior economist analyst at Bankrate, said about the Labor Department report, "This is precisely the kind of surprise we like to see, unlike the drumbeat of negative shocks that we experienced a year ago at this time." Hamrick, managing expectations, added, "While a number of economic indicators have recently surprised in a positive way, the economy still requires substantial healing.” There are around 17.4 million people who are collecting some sort of unemployment benefits, as of the week ending April 3. The U.S. still has about 8 million fewer people working today compared to last year.
The nation is heading in the right direction with steady gains in employment. Last month, the U.S. reached nearly one million new jobs added. The unemployment rate plummeted from a record high of around 15% to about 6.2%.
The turnaround in fortunes could be attributed to a number of factors. Multitrillion-dollar stimulus packages from the government flooded the economy with money. President Joe Biden is calling for another trillion-dollar package to rebuild America’s crumbling infrastructure and allocate funds toward enhancing growth in the green and clean energy sectors. Biden contends this will create millions of new jobs.
Stimulus checks were sent out to families. Unemployment benefits were enhanced to help people who are in between jobs make it through the rough patch. The Federal Reserve Bank pulled every lever to ensure the soundness of the economy. Vaccines were widely distributed and millions of people got their shots much faster than the nation thought possible.
States started easing restrictions. Restaurants, bars, clubs, gyms and other businesses were allowed to reopen and increase the capacity of customers. Furloughed workers were brought back and new hires were made to meet the surging demand. Sheltering at home, many white-collar professionals saved their paychecks.
These factors led to a more positive outlook for the future. When there is optimism, companies are more apt to hire and consumers are willing to leave their homes and spend money. These actions contributed toward igniting a record-setting rally in the stock market and stoked a blazing hot real estate sector.
The U.S. is not completely out of the woods yet. Daniel Zhao, senior economist at job aggregator and company ratings site Glassdoor, said, “We’re still pretty deep into the hole created by the pandemic.” Zhao positively added, “But at the same time, there is more optimism now than at any other point in the pandemic.”
The employment rate should be higher except there are undercurrents that are currently dragging it down. Some states said they are seeing a growing trend of fraudulent claims. The enhanced $300 per week unemployment supplement may have encouraged people to wait out the pandemic and commence a job search when the benefits run out and things look safer.
There are people who are on the sidelines, in fear of catching Covid-19 or being in a job that could cause the person to contract it and give it to compromised family members. Working mothers left the job market, as it was untenable to juggle demanding jobs, along with child care—especially as public schools were closed and they needed educational assistance. These issues should change as the economy improves.
