US jobless claims fall further but still hold well above the range that indicates healthy labor market

The US weekly jobless claims continue to fall and hit the lowest levels since pre-pandemic period in the week ending May 8.

Initial claims for state unemployment benefits fell to 473,000 from 507,000 previous week and beat 490,000 consensus, signaling an improvement in still troubled labor sector as companies held on to their workers amid growing labor shortage.

The US companies continue to struggle for labor despite job openings hitting a record 8.1 million and nearly 10 million Americans are officially unemployed, with a number of factors, such as generous unemployment benefits, fears of catching coronavirus and raw material shortages, contributing to the problems the US labor sector is currently facing that also resulted in a surprise drop in non-farm payrolls from 770,000 in March to 266,000 in April.

Despite continuous descend, the US jobless claims remain well above the 200,000 to 250,000 range that is viewed as a signal of healthy labor market, with economists seeing the problem in enhanced unemployment benefits programs that encourage many people to attempt to file a claim for assistance, without being qualified for help.