US jobless claims decline for the third straight week, signaling stabilization in labor market

US initial claims for state unemployment benefits fell to seasonally adjusted 779,000 for the week ended January 30, from previous week’s downwardly revised 812,000 and beat forecast for 830,000 increase.

The third straight weekly decline in jobless claims suggests that the labor market was stabilizing as authorities started to loosen pandemic-related restrictions on businesses, adding to signals that the worst period for the labor sector have passed.

The report from the Labor Department showed that at least 17.8 million Americans were on benefits in January, indicating that long-term unemployment was likely becoming entrenched, despite optimistic signs that the number of layoffs is declining.

That could boost President Biden’s push for the US Congress to pass his $1.9 trillion recovery plan, as Treasury Secretary Janet Yellen said that the massive stimulus plan was needed to make sure that people have jobs and if the don’t have jobs, they are supported.

Despite the jobless claims have significantly dropped from a record 6.8 million in March when the pandemic hit the United States, they are still above their previous peak of 665,000 from the 2007/09 recession.