New state unemployment claims fall sharply.

There were still more than nine million people receiving unemployment insurance under state programs — or emergency programs that extend state benefits — as of mid-April, the latest data available. That total, which does not include workers on Pandemic Unemployment Assistance, has fallen in recent weeks but has done so more slowly than new applications. At the peak of the crisis last spring, more than 20 million people were receiving benefits.

Economists should get a clearer picture of the labor market’s progress on Friday, when the Labor Department will release data on hiring and unemployment in April. The report is expected to show that employers added about one million jobs last month, up from 916,000 in March. The leisure and hospitality industry, which was hit the hardest by the initial phase of the pandemic last spring, has led the way in the recovery in recent months, a trend that forecasters believe continued in April.

Even strong job growth last month will still leave the U.S. economy with millions fewer jobs than before the pandemic. Forecasters expect the report to show that the unemployment rate fell below 6 percent in April, down from nearly 15 percent last spring. But that doesn’t factor in people — particularly women — who have left the labor force, including those caring for children while schools are closed. If those people were counted as unemployed, the jobless rate would have been above 9 percent in March and most likely close to that level in April.

Many employers have said in recent weeks that they would like to hire even faster but have struggled to find enough workers. Some have blamed enhanced unemployment benefits for discouraging people from returning to work. On Tuesday, Gov. Greg Gianforte of Montana said his state would pull out of a federal program offering enhanced benefits to unemployed workers and would instead pay a $1,200 bonus to recipients when they found new jobs.

Economic research has found that unemployment benefits can reduce the intensity with which workers search for jobs. But most studies find that the impact on the overall labor market is small, especially when unemployment is high. And Mr. Zhao and other economists say there are other reasons that labor supply might be rebounding more slowly than demand. Many potential workers are juggling child care or other responsibilities at home; others remain cautious about the health risks of returning to in-person work.

Article source: https://www.nytimes.com/2021/05/06/business/economy/weekly-jobless-claims.html