WASHINGTON -- The number of Americans applying for unemployment benefits fell last week, another sign that the U.S. job market and economy continue their steady recovery from last year's coronavirus recession.
Unemployment claims fell by 38,000 to 326,000, the first drop in four weeks, the Labor Department said Thursday. Since surpassing 900,000 in early January, the weekly applications, a proxy for layoffs, had fallen more or less steadily all year. Still, they remain elevated from pre-pandemic levels: Before covid-19 hammered the U.S. economy in March 2020, weekly claims were consistently coming in at around 220,000.
After hitting a pandemic low of 312,000 in early September, claims had risen three straight weeks, suggesting that the highly contagious delta variant was at least temporarily disrupting a recovery in jobs.
Contingent Macro Advisors said the recent uptick was also partly caused by backlog in processing orders in California and other states. Shutdowns at auto plants resulting from a shortage of computer chips could make the numbers volatile over the next few weeks, Contingent said, but "the trend towards lower jobless claims remains intact."
Unadjusted initial claims in California dropped by more than 10,000, the most among the states. In recent weeks, a surge in unemployment applications in California has driven up the nationwide total, even as many other states reported fewer claims.
Applications also notably declined in Michigan, Texas and Washington, D.C.
Overall, the job market has been rebounding with surprising strength since the spring of 2020. Forced to shut down or restrict hours as a health precaution, employers slashed more than 22 million jobs in March and April last year. But massive aid from the federal government and the rollout of vaccines has supported an economic recovery, providing consumers with the financial wherewithal to spend and the confidence to return to restaurants, bars and shops.
So far this year, employers have been adding 586,000 jobs a month, and this month's employment report, due today, is expected to show they tacked on another 488,000 in September, according to a survey of economists by the data firm FactSet.
Layoffs have eased amid an improving economy, with employers now focused on hiring and retaining workers. And while the U.S. continues to recover jobs lost at the start of the pandemic, the massive snapback in demand has outpaced businesses' ability to hire and strained already-jammed supply chains.
That's led to production slowdowns and even temporary layoffs at some firms, fueling additional churn in the weekly initial claims figures.
Altogether, 2.7 million Americans were receiving some type of jobless aid the week of Sept. 25, down by 97,000 from the week before. In early September, the federal government stopped additional aid -- including $300 a week on top of traditional state benefits -- that was meant to ease the economic impact of the pandemic.
Data from ADP Research Institute Wednesday showed U.S. companies added more jobs than forecast in September.
Information for this article was contributed by Paul Wiseman of The Associated Press and by Reade Pickert of Bloomberg News (TNS).