Yahoo Finance Jobless claims: Another 373,000 individuals filed new unemployment claims last week
New weekly jobless claims unexpectedly ticked higher last week in another sign of the labor market's choppy recovery.
The Department of Labor released its weekly report on new jobless claims Thursday at 8:30 a.m. ET. Here were the main metrics from the report, compared to consensus data compiled by Bloomberg:
Initial jobless claims, week ended July 3: 373,000 vs. 350,000 expected and a revised 371,000 during prior week
Continuing claims, week ended June 26: 3.339 million vs. 3.350 million expected and a revised 3.484 million during prior week
Despite the past week's slight bump higher, initial unemployment claims have been on the decline for months now, as vaccinations enabled re-openings that in turn fueled a need for workers across industries to keep up with consumer demand. New jobless claims are now coming in at about half the level from the beginning of 2021, and have plummeted compared to the more than 1 million claims coming in per week this time last year.
"The consensus ignored the tendency for unadjusted claims to rise in weeks when July 4 falls on a Sunday, so the risk was always to the upside. But this is noise, not signal," Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in an email. "The seasonal adjustments are struggling simultaneously with the July 4 holiday period and the annual automakers’ retooling shutdowns, which can make the headline numbers even more volatile than usual. The noise will persist through late July, but we have no doubt that the underlying trend will remain downwards."
But Americans are still filing more first-time unemployment claims than they did in 2019, when new claims averaged just over 200,000 per week. And an elevated nearly 14.2 million Americans were still claiming some form of either state or federal unemployment benefits as of the week ended June 19.
At the same time, companies have kept reporting labor supply challenges, even as millions of individuals remain on the sidelines of the workforce. The Labor Department reported Wednesday that job openings rose to a record 9.2 million in May, the latest date for which data is available. And the employment subindices in the Institute for Supply Management's services and manufacturing reports slid into contractionary territory for the first time in months in June, reflecting the strain from labor scarcities.
"This has been a recession like no other with the record levels of job openings calling into question the claims of Washington policy officials that additional stimulus is still needed to aid the recovery," Chris Rupkey, chief economist at FWDBonds, wrote in an email on Wednesday. "We are faced with two conflicting data sources one that says millions are unemployed and still out of work from the recession and the other saying job openings are in the millions, record levels which we ordinarily only see when the economy is experiencing a boom."
Many economists are bracing for a summer of choppy labor market data, with seasonal adjustments compared to last year's pandemic-impacted reports and the early phase-out of federal enhanced unemployment benefits in some states creating bumpiness in the data. Twenty-six states have opted to end federal unemployment assistance before the official early September expiration date. These early program ends began June 12 and will continue on a staggered basis through early August.
"Parsing through the data for genuine improvement from reopening versus suspension of benefits effects will be difficult," Rubeela Farooqi, chief U.S. economist for HFE Economics, wrote in a note Thursday. "Enhanced benefits have been widely cited as a reason for labor shortages that a range of companies continue to report. But those shortages appear to have been less of an issue in June, evident in the 850K rise in payrolls."
State-by-state unemployment
Slightly more than half of U.S. states reported net declines in new jobless claims last week. Puerto Rico's new jobless claims fell by 4,300 on an unadjusted basis, followed by Oklahoma with a. drop of nearly 3,700.
On the other hand, Pennsylvania saw new claims increased by 5,100, while those in New York were up by nearly. 4,600. California and Colorado's new claims each increased by more than 2,000 last week.
The states and territories of Rhode Island, Puerto Rico and Nevada posted the highest insured unemployment rates for the week ended June 19. Rhode Island's came in at 4.6%, Puerto Rico's at 4.5% and Nevada's at 4.4%. The metric captures the number of claimants of unemployment benefits to the total state population. The national insured unemployment rate stood at 2.5% for mid-June.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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