Jobless claims unexpectedly bounce higher to 373,000 as recovery turns choppy

Unemployment line
People line up outside a newly reopened career center for in-person appointments in Louisville, U.S., April 15, 2021. Amira Karaoud/Reuters
  • Jobless claims slightly increased to 373,000 last week, higher than the median estimate of 350,000.
  • The reading snaps a two-week streak of declines and places claims just above their pandemic-era low.
  • Continuing claims slid to 3.34 million for the week that ended June 26, beating the average estimate.
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Filings for unemployment insurance unexpectedly rose last week as states continued to prematurely cut the federal boost to benefits.

Jobless claims rose to 373,000 last week, the Labor Department said Thursday. That missed the median estimate of 350,000 claims from economists surveyed by Bloomberg. The print also snaps a two-week streak of declines and continues claims’ choppy downward trend.

The previous week’s reading was revised to 371,000 from 364,000.

Continuing claims, which count how many Americans are currently receiving unemployment benefits, sank to 3.34 million for the week that ended June 26. The median estimate was for a decline to 3.35 million. The count is the lowest since March 2020, when the pandemic first rocked the US economy.

Weekly claims data is starting to reflect the impact of some states’ early cancellation of the federal unemployment supplement. The federal stimulus package passed in March included a $300-per-week boost to UI payments set to expire in September. Yet 26 states – all but one led by Republicans – have moved to end the supplement early, arguing the additional payout was keeping Americans from taking jobs.

The decline in continuing claims through late June suggests the cancellation is working. Still, there’s progress to be made. Initial claims trended at roughly 200,000 per week before the pandemic, and continuing claims are still about twice their pre-crisis norm.

In other labor market news, data published Wednesday showed job openings edging higher to another record. Openings totaled 9.21 million in May, missing the median estimate of 9.33 million. The ratio of openings-to-available-workers fell slightly to 1, signifying there were as many jobs as unemployed Americans at the end of spring. By comparison, the ratio didn’t reach that threshold until eight years after the financial crisis.