US weekly jobless claims fall below 500,000 for the first time since pandemic lockdowns began

• US initial jobless claims sank to a pandemic low of 498,000 last week, a fourth straight decline.
• Economists expected a drop to 538,000. The previous week's reading was revised higher to 590,000.
• Continuing claims rose to 3.69 million for the week that ended April 24.

Fewer Americans filed for unemployment benefits last week as the gradual reopening of the economy continued to heal the US labor market.

New jobless claims totaled an unadjusted 498,000 last week, the Labor Department said Thursday morning, coming in below the median estimate of 538,000 claims from economists surveyed by Bloomberg. The reading marks a fourth straight weekly decline and a pandemic-era low.

The previous week's total was revised to 590,000 from 553,000.

Continuing claims, which track Americans currently receiving unemployment benefits, rose to 3.69 million for the week that ended April 24. The median estimate from economists saw continuing claims total 3.62 million.

Claims have now landed below 600,000 each week for a full month after wavering between 700,000 and 800,000 a week since September. The trend is an encouraging sign for hiring in the US as widespread COVID-19 vaccinations and the easing of economic restrictions allow businesses to resume activity.

Yet there's still a ways to go before claims return to their precrisis trend. Weekly counts used to trend at about 200,000 before spiking to historic highs when the coronavirus pandemic first slammed the economy in March 2020.

The latest claims data follows the release of ADP's monthly employment report. The US private sector added 742,000 payrolls in April, the analytics firm said Wednesday. While that came in below the median estimate of 873,000 added jobs, it marked a fourth consecutive monthly gain and the strongest month of payroll growth since September.

Leisure and hospitality firms, among those hit hardest by the pandemic and related lockdowns, saw the most gains, followed by businesses in the trade, transportation, and utilities sectors.

ADP's data suggests the government's nonfarm payrolls report coming out Friday will show an acceleration in workforce growth. Economists expect the Bureau of Labor Statistics to report a gain of 995,000 jobs in April, surpassing the 914,000 gain seen in March. The unemployment rate is estimated to fall to 5.8% from 6% when the data is published.