The number of Americans applying for unemployment benefits fell last week to 576,000, the lowest level since the start of the pandemic and a hopeful sign that layoffs are declining as the economy recovers from the recession.
The Labor Department said Thursday that applications plummeted by 193,000, from a revised total of 769,000 the previous week. Unemployment aid orders have now fallen sharply since reaching a peak of 900,000 in early January.
For the week ending March 27, 16.9 million people were still receiving unemployment benefits, compared to 18.2 million the previous week. These figures clearly indicate that while the economy has strengthened in recent weeks, millions are facing a loss of employment or income and have been going to work to pay their bills and rent.
The drop in applications comes after companies added 916,000 jobs in March, the highest total since August, in an indication that a sustained recovery is strengthening with the acceleration of vaccinations, the lifting of business restrictions in many states and when Americans are more willing to travel, go shopping and generally spend more. The unemployment rate fell to 6%, less than half of the 15% peak during the pandemic.
The unemployment rate has fallen consistently, from 14.8% a year ago to 6%. The last time the rate was so low, weekly benefit applications were at 350,000, well below the current level.
Economists give several reasons for the discrepancy. For starters, many states are still struggling to process the delayed accumulation of requests from previous weeks. As a result, reported applications may now result in dismissals from weeks earlier.