In the latest indication that the economy has thawed from its coronavirus-induced deep freeze, the number of Texans making first-time claims for unemployment aid has fallen significantly and now is hovering just above pre-pandemic levels.
New Texas applications for unemployment benefits came in at 18,798 last week, the U.S. Labor Department reported Thursday, down from 23,569 the previous week and slightly above the state’s pandemic-era low of 18,628 set in early June.
The figures remain elevated from the weekly Texas average of about 14,500 in June 2019 — prior to the pandemic — but mark a huge improvement from the average of over 92,000 a week in June last year.
Nationally, new applications for jobless aid came in at 364,000 last week, a drop of 51,000 from the previous week and the lowest weekly figure since the middle of March 2020, just before the pandemic sent the economy into a tailspin.
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The weekly claims data fluctuate but have been falling more or less steadily over the past few months, both in Texas and nationally. Economists said the rollout of coronavirus vaccines has boosted the willingness of consumers to venture out for shopping, traveling and eating at restaurants, spurring big increases in business activity and job openings.
“Hiring is brisk,” said Ray Perryman, president of the Perryman Group, a Waco-based economic research and analysis firm.
“As the economy opens back up and people resume more normal activities, we are seeing notable gains in sectors like accommodations and restaurants” that are labor-intensive and had suffered significant job losses beginning early in the pandemic, he said.
Initial weekly claims for unemployment benefits were stratospheric through much of last year. They peaked at more than 315,000 in Texas in early April 2020, and at more than 6.1 million nationally.
Like the Texas figures, however, the national numbers remain elevated compared with pre-pandemic levels despite the stark improvement. Before the pandemic floored the economy in March 2020, the weekly figure typically numbered around 220,000 for the United States a whole.
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“As life normalizes and the service sector continues to gain momentum, we expect initial jobless claims to remain in a downtrend,” said Joshua Shapiro, chief U.S. economist at the consulting firm Maria Fiorini Ramirez.
Applications for unemployment benefits have now fallen nationally in 10 of the past 12 weeks. In Texas, they have fallen in nine of the past 12 weeks.
Many employers have said they’re struggling to find enough workers to fill jobs as the economy rebounds, with the number of posted openings reaching a record high. Some economists say they expect hiring to catch up with demand in the coming months, especially as federal unemployment aid programs end and more people seek work.
On Friday, according to the data provider FactSet, the government is expected to report that employers added 675,000 jobs nationally in June. That would be a substantial number but still not at a pace that would allow the economy to quickly regain its pre-pandemic level of employment. The job market remains nearly 7 million jobs short of that level.
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Some businesses have complained that expanded federal aid to unemployed people — especially a $300-a-week supplemental benefit, intended to cushion the economic blow from the pandemic — has discouraged people from looking for a job.
Responding to lobbying from business groups, dozens of states, including Texas, have been cutting off the expanded federal aid.
Gov. Greg Abbott halted it as of June 26 — about 10 weeks before the federal programs are set to expire on Sept. 6 — although some unemployed workers in the state have filed a lawsuit to try to reverse his order.
Meanwhile, a number of other factors are believed to be contributing to the shortage of people rejoining the workforce as the pandemic wanes. They include difficulty arranging or affording child care, lingering fears of COVID-19, early retirements by older workers, a slowdown in immigration and decisions by some people to seek new careers rather than return to their old jobs.
Still, there is no doubt the economy is rebounding quickly. Growth for the just-ended April-June quarter is believed to have reached an annual pace of roughly 10%. And according to an index produced by the Conference Board, a private research group, consumer confidence nearly regained its pre-pandemic level in May.
This report includes information from The Associated Press.
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