The same day the Commerce Department adjusted the Gross Domestic Product (GDP) numbers for the first quarter of 2022, the Labor Department reported a drop in initial unemployment claims last week. 210,000 people filed initial unemployment claims last week, down from 218,000 the previous week.
“The 4-week moving average was 206,750, an increase of 7,250 from the previous week’s unrevised average of 199,500,” the Labor Department said in a Thursday news release. The increase in the four-week average is due to weekly jumps of 21,000 initial claims in the weeks of April 30 and May 14.
American workers are enjoying historically strong job security two years after the coronavirus pandemic plunged the economy into a short but devastating recession. Weekly applications for unemployment aid have been consistently below the pre-pandemic level of 225,000 for most of 2022 despite the overall economy contracting in the first quarter, as well as ongoing inflation concerns.
The unemployment claims drop came as the Commerce Department revealed GDP dropped by even more than initially thought in Q1. The department had initially reported a 1.4% GDP drop. The revised data released Thursday ticked that decline up to 1.5%.
The GDP estimate released today is based on more complete source data than were available for the “advance” estimate issued last month, the Commerce Department’s Bureau of Economic Analysis said in a Thursday news release. “The update primarily reflects downward revisions to private inventory investment and residential investment that were partly offset by an upward revision to consumer spending.”
The Q1 GDP drop was the first since the second quarter of 2020, right as the pandemic was beginning. It followed a nearly 7% increase in GDP in the final quarter of 2021.
The drop does not likely signal the start of a recession. It was caused, in part, by a wider trade gap which slashed first-quarter GDP by 3.2 percentage points. In addition, a slower restocking of goods in stores and warehouses due to supply chain issues knocked nearly 1.1 percentage points off the January-March GDP.
Analysts say the economy has likely resumed growing in the second quarter of 2022.
The Associated Press contributed to this report.
