Jobless claims plunge; retail sales surge

The economy showed more signs that it is rapidly gaining strength as the first-time claims for unemployment fell sharply in Texas and across the country and retail sales surged in March.

The recovery has accelerated in recent months along with increasing vaccinations against COVID-19 and jump in consumer spending supported by hundreds of billions of dollars in federal stimulus money.

On Thursday, the Labor Department reported that first-time claims for unemployment insurance fell in Texas to about 65,000, the lowest level since January. Nationally, claims plunged by 193,000 to 576,000, the lowest level since before the pandemic started.

Also Thursday, the Commerce Department reported that retail sales jumped nearly 10 percent in March to $619 billion from about $564 billion in February. Retail sales are up 28 percent from a year ago, when the pandemic broke out.

Several indicators released over the past few months have shown increasing economic activity as newly vaccinated Americans venture out to shop, eat and travel, aided by $1,400 stimulus checks. Recent surveys show both manufacturing and the service sector expanding at a strong pace.

Last month, the nation added more than 900,000 jobs while unemployment fell to 6 percent, down from a peak of 14.8 percent last April. Texas reports March employment and unemployment statistics on Friday.

The sharp declines in claims for unemployment benefits signal a stronger job market around the corner, said that Mark Hamrick, a senior economic analyst at Bankrate, a personal finance website.

Some employers are responding to the tightening job market and increasing competition for workers by boosting wages and throwing in hiring bonuses, Hamrick said. He said the job market will only get tighter in the months ahead, raising the prospect of further pay gains, particularly for entry level positions.

“With a huge, better-than-expected decline in new claims for unemployment assistance, at long last the economic recovery appears to be picking up speed,” Hamrick said. “Not only did the headline number of seasonally adjusted initial claims drop beneath the 700,000 level, but it continued on below 600,000 to the lowest since mid-March of 2020.”