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US jobless claims edge down but linger above 400,000

·1-min read
New US jobless claims edged lower last week, but lingered above 400,000

New applications for US unemployment benefits edged lower last week, resuming a downward trend, but lingering above 400,000 claims, according to US data Thursday.

Jobless claims came in at 411,000, seasonally adjusted, down 7,000 from the previous week's revised level, according to Labor Department data.

Last week's claims unexpectedly snapped a six-week streak of declines, lifting the level back above 400,000 after the June 3 weekly report came in below that level for the first time since the pandemic.

The data have shown gradual but not continuous progress as people have returned to work after historic layoffs last year. There were weekly reports of above six million new claims last spring in the wake of sudden lockdown measures at the height of the Covid-19 panic.

For the week ending June 5, the total number of people receiving aid under all programs crept up by 3,756 to over 14.8 million. The level was 31.3 million in the year-ago period.

Rubeela Farooqi, chief US economist at High Frequency Economics, called the number of new claims "surprisingly high" given that the economy continues to reopen.

"For businesses, labor shortages remain an issue as a ramping up of activity is resulting in supply/demand imbalances," Farooqi said in a note. "But these frictions should ease as health concerns subside, schools reopen and enhanced benefits end."

Another seven states terminated supplemental unemployment benefits early during the week of June 19, with 10 additional states following suit this week, said Kathy Bostjancic, an economist at Oxford Economics.

"We expect the labor market recovery to gather momentum in the months ahead and anticipate a total of eight million jobs will be created in 2021," Bostjancic said in a note.

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