New jobless claims in the United States fell below 500,000 for the first time since the COVID-19 pandemic began, a sign that the economy is strengthening and layoffs have slowed.

What You Need To Know

  • New jobless claims in the United States fell to 498,000, hitting a record low since the pandemic began

  • Unemployment claim figures dropped for a third straight week, a sign that the economy is strengthening and layoffs have slowed

  • The promising news comes ahead of the April 2021 jobs report, set to be released Friday

  • The U.S. economy is still 7 million jobs shy of pre-pandemic levels

Unemployment claim figures dropped for a third straight week, totaling 498,000 for the week ending in May 1, according to the U.S. Department of Labor, hitting yet another pandemic-era low.

At the same time, the pace of applications is still well above the roughly 230,000 level that prevailed before the viral outbreak tore through the economy in March of last year.

The promising news comes ahead of the April 2021 jobs report, set to be released Friday. Economists are predicting that U.S. employers added north of 1 million jobs in April as vaccinations soared and states lifted pandemic restrictions. Economists at Jeffries forecasted as high as 2.1 million jobs in April, the largest such prediction from Wall Street prognosticators.

However, the economy is still 7 million jobs shy of pre-pandemic levels.

As vaccinations have been more widely administered, restrictions on businesses have gradually lifted and consumers have become more willing to travel, shop and dine out, stronger spending has boosted hiring, slowed layoffs and accelerated growth. The economy grew last quarter at a vigorous 6.4% annual rate, with expectations that the current quarter will be even better.

The government’s report Thursday showed that about 16.2 million people were continuing to collect unemployment benefits in the week that ended April 17, down from 16.6 million in the previous week. That’s a sign that some former recipients have found jobs.

As economic growth has accelerated, sales of vehicles and newly built homes have soared, manufacturing output has risen and Americans on average have increased their savings and wealth. In part, this is because of $1,400 stimulus checks that were distributed to most adults and in part because many affluent households have built up savings while working from home and have benefited from a surging stock market.

The economy, though, is restarting so quickly that it’s creating supply bottlenecks and parts shortages. Many companies, especially restaurants, can’t find enough applicants to fill available jobs. Others are raising pay to attract more applicants.

There are 3.69 million Americans collecting unemployment benefits as of the week ending in April 24, 2021.

The Associated Press contributed to this report.