US weekly jobless claims tumble to new pandemic-era low of 385,000

• US jobless claims dropped to 385,000 last week, setting a pandemic-era low.
• The reading was just under the median estimate. The prior week's figure was revised down to 405,000.
• Continuing claims rose to 3.77 million for the week that ended May 22, coming in above forecasts.

The number of Americans filing for unemployment insurance sank to another pandemic-era low last week as the labor market's recovery charged forward.

Jobless claims totaled an unadjusted 385,000 last week, the Labor Department said Thursday. The median estimate from economists surveyed by Bloomberg was for 387,000 initial claims.

The count marks a fifth straight decline for weekly filings and again places weekly claims at their lowest point of the pandemic. It's also the first time weekly claims have fallen below 400,000 since COVID-19 ensnared the US economy. The prior week's count was revised to 405,000 from 406,000.

Continuing claims, which count Americans receiving unemployment benefits, gained to 3.77 million for the week that ended May 22. That was above the median estimate of 3.62 million claims.

Claims have now landed below 500,000 for the fourth week straight, signaling a steady decline in layoffs as businesses reopen and economic activity rebounds. While individual weekly readings can be somewhat volatile, the downward trend is encouraging after several months of weekly filings steadily landing between 700,000 and 800,000.

Still, claims counts are roughly double the pre-pandemic norm. Continuing claims are also twice their 2019 average, underscoring the progress still to be made in healing the labor market.

Elsewhere in economic data, ADP's monthly employment report showed the US private sector adding 978,000 jobs through May as reopening continued. The reading beat the median estimate for 650,000 new jobs. The leisure-and-hospitality and education-and-health services sectors added the most jobs, while the information sector shed payrolls last month.

The ADP and claims data are only the opening acts for the Bureau of Labor Statistics' highly anticipated jobs report. The Friday release comes after a hugely disappointing April report that showed hiring slowing sharply and raised concerns of a widespread labor shortage.

The weeks since have seen claims decline further, suggesting the economy continued to heal following the bleak April data. And economists are largely hopeful for a pickup in job creation. The median estimate for May nonfarm payrolls is an addition of 653,000 jobs. That would handily exceed the 266,000 payrolls added in April, though it would still lag the 770,000 jobs added in March.