The numbers: Applications for U.S. unemployment benefits fell below 500,000 in early May for the first time since the onset of the pandemic, pointing to an upsurge in hiring as companies race to add back staff with the economic recovery building momentum.
Initial jobless claims in the states sank 98,000 to 498,000 in the seven days ended May 1, the government said Thursday. It was the fourth weekly decline in a row.
Economists surveyed by Dow Jones and The Wall Street Journal had forecast new claims to total a seasonally adjusted 527,000.
An additional 101,214 applications were filed through a federal pandemic-relief program.
Adding up new state and federal claims, the government received 605,884 applications last week for unemployment benefits, based on actual or unadjusted figures. That’s also a fresh pandemic low.
Unemployment claims are still two and a half times higher compared to the last month before the pandemic began. The number of applications had been running in the low 200,000s before the viral outbreak early last year.
Read: U.S. gains 742,000 private-sector jobs in April as surging economy spurs hiring spree, ADP says
What happened: New applications for jobless benefits fell the most in Virginia, New York, Florida, California and Oklahoma . Kentucky was the only one to post a sizable increase.
The number of people already collecting state jobless benefits, meanwhile, actually rose by 37,000 to a seasonally adjusted 3.69 million. The increase is likely to unwind next week based on current trends, however.
Some 4.97 million who have exhausted state compensation were also getting benefits through an emergency program funded by the federal government.
Altogether, the number of people reportedly receiving benefits from eight separate state and federal programs fell by 404,509 to an a new pandemic low of 16.2 million as of April 17. Total claims had topped 30 million early in the crisis.
Fewer than 2 million people were getting benefits before the pandemic erupted.
Note to readers: A government review found the number of distinct individuals collecting benefits has been inflated by fraud and double counting. Widespread fraud has also resulted in at least $63 billion in improper payments, a Labor Department review estimated.
Big picture: The economy has cranked up after gigantic federal stimulus payments and a waning coronavirus epidemic. More than half of all adults have gotten at least one shot and new cases are falling, allowed states to lift business restrictions.
Read: The biggest part of the economy is surging and rehiring workers
Companies have responded by hiring more workers and preparing to fully reopen. One of their biggest potential problems could be finding enough people to hire.
Businesses complain some workers are unwilling to accept jobs because they make more from unemployment benefits. Other people may still be caring for young children or aging relatives, a problem that will persist until schools, daycare centers and nursing homes are all open again.
What they are saying? “Jobless claims are still very high, but they are finally beginning to drop to more normal levels,” said chief economist Stephen Stanley of Amherst Pierpont Securities.
See: A visual look at how an unfair pandemic has reshaped work and home
Market reaction: The Dow Jones Industrial Average
and S&P 500
were set to open slightly higher in Thursday trades.