- Initial jobless claims fell slightly to 411,000 last week, coming in above the median economist estimate.
- The reading resumes a steady streak of declines after a surprise jump last week.
- Continuing claims fell to 3.39 million for the week that ended June 12. That landed below estimates.
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Weekly filings for unemployment benefits fell just barely last week, resuming a steady downward trend after last week’s surprise increase.
Jobless claims totaled an unadjusted 411,000 last week, the Labor Department said Thursday. Economists surveyed by Bloomberg held a median estimate of 380,000 claims. The previous week’s count was revised to 418,000 from 412,000.
The slight decline suggests the labor market’s recovery may be stagnating as claims fail to return to their pandemic-era lows. Though the government’s monthly payrolls report includes the most detailed hiring data, weekly claims counts reveal whether businesses are holding on to employees or laying them off.
Continuing claims, which track Americans receiving unemployment benefits, edged lower to 3.39 million for the week that ended June 12. The median estimate was for continuing claims to drop to 3.46 million.
Claims counts are still roughly double what they were before the pandemic roiled the labor market. And while initial claims counts steadily declined through spring, continuing claims haven’t staged as large a recovery. The disparity suggests that, while fewer businesses are laying off workers, Americans receiving benefits aren’t rushing back to the workforce.
The report is also the first to reflect any changes from some GOP-led states’ early cancelation of the federal unemployment insurance boost. The $300-per-week supplement was included in Democrats’ March stimulus package and originally set to expire in September. Yet 25 states have moved to end the benefit early in hopes of pushing more Americans into the workforce. While the latest claims data only includes the first handful of states to cancel the benefit, job search data suggests the move isn’t having its intended effect.
Federal Reserve Chair Jerome Powell reiterated on Tuesday that enhanced UI is just one of many factors likely playing a role in the nationwide labor shortage. Fears of COVID-19 and childcare costs are also keeping Americans from returning to the labor market, he told a House subcommittee.
There may be a “bit of a speed limit” on rehiring due to skills mismatches as well, Powell added. The central banker has long warned that the post-pandemic economy will be different from that of early 2020, and that millions of Americans will struggle to find new work. The “matching function” of pairing job openings with eligible Americans may take some time and limit the speed of the economic recovery, Powell said.
“We’re digging out of a very deep hole,” he added. “We have a long way to go.”