Jobless claims drop to pandemic-low 473,000

Jobless claims drop to pandemic-low 473,000
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Initial jobless claims for the first week of May set a new pandemic low of 473,000, according to Labor Department data released Thursday.

Seasonally adjusted claims dropped 34,000 from the previous week's revised figure, which was adjusted up to 507,000 from 498,000.

The figures are a balm after an unexpectedly poor showing in the April jobs report, which was released last Friday. That report showed just a quarter of the expected new jobs created and a slight uptick in the unemployment rate.

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The April jobs data put the Biden administration on the defensive and spurred calls from Republicans to scale back emergency unemployment benefits they say are incentivizing people to stay out of work.

Seven GOP-run states have announced plans to eliminate the additional benefits in late June or early July.

Thursday's data saw a slight uptick in Pandemic Unemployment Assistance, an emergency program expanding benefits to gig workers and the self-employed.

Applications for that program rose by 1,756 to 103,571.

The latest data for total continued claims, which marked the week ending April 24, showed 16.8 million continuing claims, up some 700,000 from the previous week.

Mark Hamrick, a senior economic analyst at Bankrate, said that claims were moving in the right direction, and were a spot of good news amid bumpier economic indicators.

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"Even as still elevated levels of jobless claims remain a concern, other pressing issues are now competing for attention," he said.

"In the very near term, there’s been a sharp rise in gasoline prices and the lack of supply in the Eastern U.S. has resulted in panic buying after the Colonial Pipeline shutdown. With the reopening of the economy, prices have risen more than expected, raising worry whether the Federal Reserve might have underestimated the risks of inflation."

Producer prices rose 0.6 percent in April, roughly double the level that economists expected.

Updated at 9:05 a.m.