Unemployment claims fall to lowest level of pandemic

The number of Americans applying for unemployment benefits fell to its lowest level since the pandemic began, a sign the job market is still improving even as hiring has slowed in the past two months.

Unemployment claims dropped 36,000 to 293,000 last week, the second straight drop, the Labor Department said Thursday. That's the smallest number of people to apply for benefits since March 2020, when the pandemic intensified. Applications for jobless aid, which generally track the pace of layoffs, have fallen steadily since last spring as many businesses, struggling to fill jobs, have held onto their workers.

Hiring has slowed in the past two months, even as companies and other employers have posted a near-record number of open jobs. Businesses are struggling to find workers as about three million people who lost jobs and stopped looking for work since the pandemic have yet to resume their job searches. Economists hoped more people would find work in September as schools reopened, easing child care constraints, and enhanced unemployment aid ended nationwide.

But the pickup didn't happen, with employers adding just 194,000 jobs last month. In a bright spot, the unemployment rate fell to 4.8% from 5.2%, though some of that decline occurred because many of those out of work stopped searching for jobs, and were no longer counted as unemployed.

At the same time, Americans are quitting their jobs in record numbers, with about 3% of workers doing so in August. Workers have been particularly likely to leave their jobs at restaurants, bars, and hotels, possibly spurred by fear of the delta variant of COVID-19, which was still spreading rapidly in August.

Other workers likely quit to take advantage of higher wages offered by businesses with open positions, or left jobs because child care for children too young to go to school has been harder to find.