Jobless claims fall below 300k for first week since lockdowns

New weekly claims for jobless aid sunk to a pandemic low last week, according to data released Thursday by the Labor Department, falling below 300,000 for the first time since COVID-19 shattered the economy.

In the week ending Oct. 9, seasonally adjusted initial claims for unemployment insurance fell to 293,000, a decline of 36,000 from the previous week’s revised total. Claims dropped to the lowest level since the week of March 14, 2020, when the U.S. saw 256,500 new applications for jobless aid shortly before more than 20 million Americans lost their jobs.

Without seasonal adjustments, claims totaled 277,632 last week, rising 16,017 from the previous week.

Roughly 3.6 million Americans were on some form of jobless aid as of Sept. 25, the latest date for which data is available, a decline of more than 523,000 from the week of Sept. 18.

While job growth fell off sharply in August and September amid surging cases of COVID-19, the continued decline in jobless claims this month suggests businesses have been able to avoid widespread layoffs.

The U.S. added just 366,000 jobs in August and 194,000 in September, down from a gain of more than 1 million in July, as the delta variant drove surging COVID-19 cases, filled hospitals, closed schools and dissuaded Americans from some close contact activities. The leisure and hospitality sector, which lost more jobs than any other industry last year, was hit particularly hard by the delta surge after struggling for months to fill job openings.

Economists have also downgraded their projections for growth this year and next due to the slowdown, but still expect gross domestic product to have grown by roughly 6 percent in 2021 and 4 percent in 2022 — nearly double the pre-pandemic rate.

“While the September jobs report revealed a slower pace of job creation, the labor market recovery continues to move forward and the claims data are consistent with an improving employment situation. We expect further progress in the months ahead as the health situation is improving following the surge in cases over the summer from the Delta variant,” wrote Nancy Vanden Houten and Gregory Daco of Oxford Economics.

–Updated at 9:29 a.m.