The number of Americans filing new claims for unemployment benefits has dropped drastically in the past week. With this unemployment claims have decreased for the fifth week in a row and reached a 14-month low. This is driven by brisk economic activity, increased vaccinations and more job opportunities offered by the economy.
Initial claims for unemployment benefits were $ 385,000 for the week ended May 29 based on a report released by the Department of Labor on Thursday. Economists even expect jobs to drop to 387,000.
New jobless claims dropped below 400,000 for the first time since the pandemic outbreak in the U.S. and pushed the weekly average decline. On the other hand, the number of Americans claiming benefits through the federal Pandemic Unemployment Assistance (PUA) program and the Pandemic Emergency Unemployment Compensation (PEUC) program is increasing.
The number of claims is expected to continue to decline as more workers return to their jobs and the administration is planning to reduce unemployment benefits. The federal government’s extended unemployment program will end in September and has the possibility of ending earlier.
While Federal Reserve officials continue to stress the need for greater increases in the labor market, the number of claims indicates that jobs are growing consistently.
In conclusion, this declining number of jobless claims has given little reassurance from the shocking disappointment last April. Market players are increasingly optimistic and expect NFP data to continue to rise.
The US dollar index strengthened against major currencies with an increase of 0.32% to 90.186.
