New Unemployment Claims Gradually Begin to Drop

The widespread disruptions caused by the pandemic resulted in millions of Americans losing their jobs last year and subsequently applying for unemployment benefits. In one especially bleak week in spring 2020, new unemployment claims topped out at more than six million as businesses locked down to prevent the spread of coronavirus. Although the amount of new claims steadily began to decline after this historic high, hundreds of thousands of Americans have nevertheless applied for unemployment week after week since the start of the pandemic. 

Rising claims at the start of 2021 worried analysts further that the crisis was set to continue without end. But while states have averaged about 700,000 new claims per week this year, that number has finally started to decrease over the last few weeks. New claims fell to 600,000 a fortnight ago and dropped by another 100,000 a week later. Although 500,000 new claims in a week remains comparatively high to previous years, the gradually decreasing amount of claims has analysts hopeful that an economic recovery could be underway. 

“In the last few weeks we’ve seen a pretty dramatic improvement in the claims data, and I think that does signal that there’s been an acceleration in the labor market recovery in April,” said economist Daniel Zhao. Nevertheless, nine million people remain on state unemployment as many others continue to receive benefits from the Pandemic Unemployment Assistance program. And while job growth has been gaining steam, the U.S. still has millions fewer jobs now than it did before the pandemic. 


  1. Why do you think the number of new unemployment claims is steadily starting to drop?
  2. Do you think the decline in new unemployment claims points to the beginning of an economic recovery? Why or why not?

Source: Ben Casselman, “New State Unemployment Claims Fall Sharply,” The New York Times, May 6, 2021.