By Geoffrey Smith
Investing.com -- The number of people making initial claims for jobless benefits fell last week to its lowest level since the pandemic erupted a year ago, signaling that the reopening of the U.S. economy is damping the pace of layoffs around the country.
The Labor Department said that 712,000 initial jobless claims were filed last week, down from 754,000 the week before and a bigger drop than expected. The consensus forecast ahead of time had been 725,000.
Continuing claims, which are reported with a one-week lag to initial claims, also fell by more than expected to 4.144 million, a drop of almost 200,000 from the previous week.
The Labor Department's figures weren't all rosy, however. The broadest measure of people claiming unemployment-related benefits rose by nearly 2 million to top 20 million again, thanks to rises of 1 million each in claimants under two pandemic-related schemes, known as Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation. Those programs cater to the self-employed (notably to gig workers) and the long-term unemployed.
Almost all of that increase was accounted for by the state of California, suggesting that the state may have undercounted its claimants in past weeks.
The data come against the backdrop of a U.S. economy that is slowly starting to eat away at the vast amount of slack in the labor market. The economy added nearly 400,000 jobs last month, with more than that number created in the services sector, where restaurants and non-essential stores were among the biggest hirers.