Jobless Claims Unexpectedly Rise to 412,000
New claims for unemployment benefits unexpectedly climbed last week, the first stumble since April.
The Labor Department said Thursday that jobless claims rose 37,000 from the week before to a seasonally adjusted 412,000. The number of jobless claims generally reflects the pace of layoffs.
The unadjusted number of initial claims under state programs totaled 402,352 in the week ending June 12, an increase of 37,174 or 10.2 percent from the previous week. The seasonal factors had expected a fractional decline from the previous week. In addition, for the week ending June 12, 52 states reported 118,025 initial claims for Pandemic Unemployment Assistance. So total new claims, unadjusted, rose 19 percent to just over 520,000.
Economists had expected a decline to 360,000 after the 376,000 initially reported a week earlier. The prior report was revised down by 1,000.
Many Americans are hanging back from working because, for a very large share of those unemployed, supplemental federal jobless benefits, on top of regular state unemployment aid, pay them more than their old jobs did. Others are contending with health and child care issues related to COVID-19 and, in some cases, with career uncertainty after the recession wiped out many jobs for good. Some who have lost work during the pandemic have decided to retire.
Many states, though, are set to begin dropping the supplemental federal jobless aid this month. That will likely prompt many Americans to return to work over the coming weeks and months. The enhanced benefits, which pay $300 a week on top of an average $320 in state benefits, are set to expire nationwide in September.
With vaccinations up and more consumers venturing out to spend — on restaurant meals, airline fares, movie tickets, and store purchases — the economy is rapidly recovering from the recession. All that renewed spending has fueled customer demand and led many companies to seek new workers, often at higher wages, and avoid layoffs.
In fact, the speed of the rebound from the recession has caught many businesses off guard and touched off a scramble to hire. In May, employers added a less-than-expected 559,000 jobs, evidence that many companies are struggling to find enough workers as the economy recovers faster than expected.
But many economists expect hiring to catch up with demand in the coming months, especially as federal unemployment aid programs end and more people pursue jobs. They note that the economy still has 7.6 million fewer jobs than it did before the pandemic struck.
And employers are posting job openings faster than applicants can fill them. In April, they advertised a record 9.3 million job openings, up a sharp 12% from the number in March.
The rapid rollout of vaccines has brought the number of new confirmed COVID-19 cases down to an average of just over 12,000, from around 250,000 a day in early January.
Though jobless claims have tumbled since the start of 2021, when they exceeded 900,000, they remain high by historical standards. Before the pandemic paralyzed the economy in March 2020, unemployment applications were running at about 220,000 a week.
In Thursday’s report, the government said a total of 3.5 million Americans were continuing to collect traditional state unemployment benefits in the week ending June 5, up by just 1,000 from the week before.