Initial jobless claims continued to decelerate for the sixth straight week as the labor market slowly normalizes, according to government data released Thursday.
State employment agencies reported 376,000 new claims for unemployment insurance for the week ending June 5, down from 800,000 claims per week earlier in the year.
As claims decline, more income will be put to work in the domestic economy, stoking demand for goods and services as the final 10% or so of the economy that is currently closed looks to reopen this summer.
There is a long way to go to before we reach the pre-crisis weekly average of 210,000 initial claims per week. Nevertheless, there has been a change in the labor market as mass vaccinations allow workers to get back on the job. This is shown by the deceleration in initial jobless claims beginning around the first week of April.
The reopening of establishments—and the general acceptance of safety—should continue as younger children become eligible for vaccinations and return to in-person education.
We expect more people returning to work in the private sector as summer approaches and in the public sector as school employees return to their positions. There are of course risks to that optimism, recognizing the pockets of resistance to vaccinations and the spread of variants of the virus.
For more information on how the coronavirus pandemic is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.