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The number of citizens looking for a job shrank for the first time during the coronavirus pandemic. It is a sign that people are starting to return to work.

However, ironically, millions of Americans still filed for unemployment benefits. Continuing claims fell to 21.1 million for the week ended on May 16, according to the U.S. Labor Department.

Moreover, analysts had expected an increase in continuing claims.

The department tallies Americans’ ongoing benefit claims in state programs and they revealed the figures on Thursday. Please note the data is reported with a one-week lag.

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With more states reopening, the numbers suggest that the job market is starting to rebound as businesses also reopen.

Economic Stagnation or Recovery?

According to Bloomberg, initial jobless claims for regular state programs totaled 2.12 million in the week ended May 23. This brought the 2 1/2-month total above 40 million.

The latest initial-claims tally is down from last week’s 2.45 million, marking the eighth straight weekly decline. However, it’s still far above the 212,000 average of initial claims in the first two months of 2020 and the pre-pandemic record of 695,000.

Thursday’s Labor Department report also showed that filings under the federal Pandemic Unemployment Assistance program fell to 1.19 million. It previously was 1.25 million covering 32 states. These unemployment benefits went to those who are not traditionally eligible, such the self-employed and gig workers.

The latest week’s federal pandemic claims brought the total number under federal and state programs to 3.11 million last week, down from 3.43 million the prior week.

Total continuing claims under all state and federal programs rose to 31 million in the week that ended May 9 from 27.3 million.

The pandemic has also wreaked havoc on the manufacturing industry. U.S. orders for durable goods sank sharply for a second month in April.

The record demand for benefits has had state unemployment offices struggling to keep up. Many applicants have waited on edge for the payments without receiving them amid the economy’s stop and a wave of layoffs.

California is seeking 1,800 additional staff to help process claims. As the country’s most populous state, there are currently 3,000 current and temporary employees working on claims.

In addition, 700 California state employees worked over the Memorial Day weekend to process paper claims.