Jobless claims fall below 300,000 for the first time since the pandemic began

Initial jobless claims fell below 300,000 for the first time since the early days of the Covid-19 pandemic, the Labor Department said Thursday.

In another sign that the jobs market is getting closer to its old self, first-time claims for unemployment insurance totaled 293,000, the best level since March 14, 2020, which saw 256,000 claims just as the Covid-19 spread intensified.

The Dow Jones estimate for claims was 318,000. Last week’s total represented a decline of 36,000 from the previous week.

The four-week moving average, which helps smooth out weekly volatility, dropped to 334,250, a 10,500 decline that also marked the lowest number since March 14, 2020.

Also, continuing claims, which run a week behind the headline number, fell by 134,000 to 2.59 million, another pandemic-era low.

Jobless claims fell as enhanced unemployment benefits associated with the pandemic began to fade. The rolls of those getting benefits under all programs declined by more than half a million to 3.65 million, according to data through Sept. 25.

Most of the decline came from those leaving two pandemic-related federal programs as well as other extended benefits. A year ago, the total receiving benefits was close to 25 million.

The drop in claims comes at an important time for the labor market, which has added jobs over the past two months at a decidedly slower than expected pace – 366,000 in August and 194,000 in September, leaving the household employment total still more than 5 million shy of where it was pre-pandemic.

Thursday’s jobless claims report covered the period just before the Labor Department’s survey week for the closely watched nonfarm payrolls report.

Federal Reserve officials have been watching the job market’s progress closely as the central bank weighs when to begin pulling back on the extraordinary help it’s been providing. Minutes released Wednesday from the Fed’s September meeting indicated that the first pullback could start as early as mid-November with a reduction in the amount of bonds it buys each month.