WASHINGTON (AP) – The number of Americans seeking unemployment benefits rose last week from the lowest point in the pandemic, even as the labor market appears to rebound on the strength of a reopened economy.
The Labor Department said Thursday that jobless claims rose last week to 419,000, the highest number in two months, from 368,000 the week before. The number of first-time claims, which usually follows layoffs, has been dropping steadily since it surpassed 900,000 in early January.
Economists characterized last week’s increase as most likely an incident caused by some one-time factors and in part the result of the inevitable week-to-week data bump. Unemployment aid claims surged last week, for example in Michigan, where GM announced the halt of truck production due to supply shortages.
“I’m not afraid this reading signals a sudden weakening in demand for labor,” said Stephen Stanley, economist at Amherst Pierpont Securities. “In fact, I’m pretty sure that’s not the case.”
Americans are shopping, traveling and eating more as the pandemic wears off, boosting the economy and forcing businesses to seek more workers. Firms posted the most jobs available in the two decades the data was tracked. Hires have increased, although companies say they often can’t find enough employees at the wages they’re willing to pay.
At the same time, analysts are concerned about the potential economic consequences of an increase in confirmed viral infections as the highly contagious delta variant spreads, especially among the unvaccinated. The seven-day moving average in the United States for new daily cases has accelerated over the past two weeks to more than 37,000 on Tuesday, from less than 13,700, according to data from Johns Hopkins University.
Complaints from companies that they can’t find enough workers have led 22 states to prematurely end a federal unemployment benefit of $ 300 per week, which is on top of state unemployment assistance. Twenty states have ended their participation in two other federal programs – one of which offers benefits to self-employed and co-workers and another that has served people who have been unemployed for six months or more.
Officials in two other states, Indiana and Maryland, had tried to end supplementary aid programs but were blocked by court rulings. Nationally, the programs will all expire in early September.
The early stoppages in the increase in unemployment assistance have contributed to a steady decline in the number of people receiving unemployment benefits. That number fell to 12.6 million in the week ending July 3, the latest period for which data is available, from 13.8 million the week before. More than 600,000 unemployment assistance recipients have been cut in Texas alone.
The long-term decline in jobless claims coincides with accelerating economic growth. The U.S. economy is believed to have grown rapidly in the April-June quarter as Americans, teeming with cash from stimulus checks and the stock market and home equity, increased their home equity. expenses.
Purchases at retail stores and restaurants increased in June, the government said last week. Retail sales are about 20% above pre-pandemic levels.
The ranks of the unemployed have shrunk as companies have stepped up their hiring. In June, employers created 850,000 healthy jobs, further proof that the reopening of the economy was leading to a strong recovery from the pandemic recession.
Employment data for June also suggested that workers had an advantage, as companies, desperate to fill positions, offered higher wages. The average hourly wage increased 3.6% from the previous year. That said, the economy still has 6.8 million fewer jobs than before the virus erupted in March of last year.
Unemployment assistance claims are generally viewed as a rough measure of the pace of layoffs. During the pandemic, however, many states were beset by fraudulent claims that skewed the data.
A surveillance report released this week found that states distributed $ 12.9 billion in unemployment benefit overpayments from April 2020 to March, of which about a tenth of the amount was found to be fraudulent. Some of the remaining money may also have involved fraud, but will not be classified as such until investigated.
GAO also found that many unemployed people still had to wait a long time for their jobless claims to be processed and approved. Nationally, about one in ten people who first received benefits in May had waited more than 10 weeks.