The Labor Department has released a new report about the number of jobless claims this week and the news is very good. According to the data, the number of applications filed for unemployment benefits dropped by 20,000 last week to 385,000 which is a new pandemic low.
The number of jobless claims is representative of the number of individuals who have filed for unemployment over the course of the previous week. The figure originally forecast be experts was 390,000, so the actual number beat expectations. The number is also lower than those logged the week before, which was 406,000.
The numbers come as economists closely watch how the economy is rebounding from the COVID-19 pandemic and at what rate people are returning to the labor force. Some economists worry there is a labor shortage and fear the economy is heating up too much from pent-up demand, the easy money policies of the Federal Reserve, and high levels of federal spending.
Against the backdrop of the potential labor shortage, several Republican-led states, about half of the country, have decided to opt out of the federal expanded unemployment program that was implemented to bolster state unemployment payments during the pandemic.
While the expanded program, which gives the unemployed $300 per week on top of whatever states already provide, is scheduled to sunset in September, the governors of states that are ending the program early hope that doing so will encourage people to fill a glut of job openings.
A lot of companies, especially those that have lower-wage employees, have complained that it’s harder now to keep staffed as the expanded unemployment program is causing folks to avoid these kind of jobs because they make more from the benefits than from working. Some have actually raised their wages in an attempt to stay competitive.