US Jobless Claims Drop to 406,000 - A Pandemic Low

What Happened:

• According to a report released by the Labor Department on Thursday, 406,000 Americans claimed first-time jobless benefits over the last week, a 38,000 drop from the previous week and the lowest number since the start of the pandemic last year.

• This is an encouraging sign that layoffs are slowing down because of an improving job market and that the economy is on a rebound.

• Despite the positive trends, some businesses are having difficulty finding applicants for open job positions. Many Republican leaders believe this is because of the extra Covid-19 relief stimulus and 22 Republican-led states have acted to block the $300-a-week federal unemployment benefit saying that the extra money is discouraging the unemployed from seeking jobs. Florida and Kansas, two more Republican-led states, are also considering taking the same action.

• Despite the positive trends, many economists are concerned that the sudden increase in consumer demand will lead to additional inflation (we have already experienced a spike in inflation this year), a concern that Wall Street also shares.

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