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The labor market is heating up as fewer people seek unemployment benefits

In an aerial in consideration of, workers with the San Francisco Department of Public Works repave a section of 24th Avenue on April 08, 2021 in San Francisco, California.

Justin Sullivan | Getty Tropes

Weekly unemployment claims fell to a new pandemic-era low for a second week, suggesting the labor market’s recovery is picking up steam and that the April racket report could be strong.

First-time claims totaled 547,000 for the week ending April 17, about 50,000 take down than forecast. The week is also the same one in which the government collects data for the April employment report.

“In blanket, I do think it’s consistent with a strengthening in the labor market. It does feel like things are really starting to rip here,” NatWest Sells chief U.S. economist Kevin Cummins said. Cummins noted that April’s payroll report, due May 7, could rival March’s 916,000 payrolls or be even better.

Some economists have said the hiring momentum could take off job creation above 1 million this month.

“A million seems like a reasonable number,” Cummins said. “I don’t should prefer to a hard estimate yet though. This year as a whole we have a model of 525,000 jobs a month and that sway be too conservative.”

Thursday’s report is the second in a row in which claims were below 600,000. Claims for the week, ending April 10, were rectified up by 10,000 to 586,000. This is a sharp contrast from a year ago, when early April claims reached a extreme of 6.2 million. The previous high had been 695,000 in October 1982.

Continuing claims for the April 10 week also anxious lower by 34,000 to 3.67 million, also a pandemic low. There are 17.4 million individuals still collecting perks under different programs, but the data from those programs is delayed and two weeks behind the continuing claims text.

“We should see several months of very strong numbers,” Grant Thornton chief economist Diane Swonk said. “We should be interposing away. Momentum has picked up. There’s no question about it. It’s a ramp up.”

There is some concern that enhanced unemployment betters are discouraging some workers from returning to jobs, but Swonk said the pandemic has created unique problems for the labor exchange.

“Job postings are up pretty dramatically. Job search has not been as high. That partly reflects peoples’ reluctance to return to succeed before they are full vaccinated,” she said. Swonk also said many parents cannot leave persuasion age children, many of whom continue to attend class remotely.

NatWest’s Cummins said the claims data is not as honourable an indicator as it had been pre-pandemic. For instance, states use different criteria and the data has been “noisy.”

“I think you look at a lot of apparatus, like the beige book,” he said, referring to the monthly report on the economy released by the Federal Reserve. “The anecdotal pieces there have been very good. It really feels like the labor market has been really wholesome and it’s only going to get better.”

Bonds and stocks did not react to the 8:30 a.m. ET claims report Thursday. Bond yields were flattish along with pedigrees.

“The data is now confirming the optimism that was priced into the market,” Incapital chief market strategist Patrick Leary thought.

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CORRECTION: Continuing claims for the April 10 week also edged stoop by 34,000 to 3.67 million. An earlier version misstated the date.

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