After falling for six weeks straight, jobless claims held virtually steady at 411,000 in the week ending June 19 (on a seasonally adjusted basis), once again signaling the struggling labor market still has a long recovery ahead.
Last week’s new unemployment claims were only slightly lower than the previous week’s revised claims of 418,000, which marked the figure’s first weekly increase in nearly two months.
The data was also much worse than the 380,000 claims economists were expecting.
Meanwhile, the number of Americans filing claims under the Pandemic Unemployment Assistance program, which extends benefits to self-employed workers not eligible for traditional state programs, ticked down to 104,682, according to the weekly data released Thursday.
Though much lower than the 31.3 million weekly claims filed in the comparable week last year, the total number of Americans receiving any form of benefit ticked up slightly, with some 14.8 million claims in the week ending June 5.
“While progress in claims filings may have stalled in recent weeks, the change has been subtle, so resist the urge to read too much into it or characterize things as getting worse,” Bankrate Chief Financial Analyst Greg McBride wrote in a Thursday email. “Continuing claims, after all, did move slightly lower, and are at the lowest since the onset in March 2020.”
5.8%. That was the unemployment rate in May, according to the Labor Department’s monthly jobs report, down from 6.1% in April. The unemployment report for June will be released next Friday, July 2.
What To Watch For
“Economic reopening and a strengthening labor market should lead to renewed declines in unemployment filings, with the summer months promising to bring us closer to the normal we’ve all been craving,” says McBride.
Last week, the Fed said it wants to see more progress in the labor market, which is still down 7.6 million jobs since the onset of the pandemic, before it moves to raise rates and tighten policy. The Fed has long insisted the economy is still fragile and in need of assistance due to the ongoing pandemic, but the central bank is likely to change its messaging in light of expected job growth by the end of this year. Officials say they now expect two interest rate hikes by the end of 2023—sooner than previously expected.
At least 26 states have announced they will stop participating in the federal government’s supplemental unemployment benefits program, which provides an extra $300 a week to jobless Americans, by July 3. Some officials are claiming the payments disincentivize workers to find jobs, but in a note to clients late last month, JPMorgan economists said the early end to the unemployment insurance, which is set to expire in September, looks “tied to politics, not economics.” They argued that many of the states that have announced the early reduction are not showing signs of a tight labor market or strong earnings growth—two factors used to justify ending the enhanced benefits. Meanwhile, some states have moved on legislation that would authorize one-time “signing bonuses” for unemployed residents who find work.