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Workers’ filings for initial unemployment benefits rose by 37K to 412K last week, marking the first increase since late April and halting what had been a steady downward trend in filings.
On Thursday, the Labor Department said the increase was the biggest jump since late March. Claims for the past week were revised slightly to 375,000.
The four-week moving average, which moderates weekly volatility, reached a new pandemic low of 395,000. This is the lowest average level since March 2020, when the pandemic first spread in the United States
The latest claims numbers came as Covid-19 restrictions continued to erode. Total new claims in recent weeks have approached what economists consider a normal range.
The long-term average for initial unemployment claims dating back to 1967 — including periods of expansion and recession — is 371,763, according to Labor Department data.
Ann Elizabeth Kunkel, an economist at job search site Indeed.com, said jobless claims “shouldn’t rise a bit as a cause for concern just yet”. “The big picture is that although we are not back to the ‘normal’ level yet from the initial claims, it is no longer astronomically high.”
Thursday’s report showed that unemployment lists shrank late last month. The number of continuing benefits claims — a proxy for those receiving payments — fell by more than 500,000 to 14.8 million in the week ended May 29. This includes those taking advantage of benefits through pandemic-specific programs introduced last year, including those for the self-employed.
The number is still well above pre-pandemic levels, but it is half the number taking advantage of benefits in the previous year, according to the Department of Labor. About half of the states have announced that they will withdraw part or all of those federally subsidized benefits in the coming weeks — before they expire in early September.
Adam Cummins, director of economic research at Moody’s Analytics, said he believes the normal range for first-time applications is between 200,000 and 250,000, not including recessions.
“More and more consumer-facing industries devastated by the pandemic are returning to the Internet,” said Mr. Cummins. He added that in his view, a low to the mid 200,000 “would be an indication that we have stabilized.”
Other economists have offered differing views on the normal form of new jobless claims, totaling as much as 350,000 per week.
The current level of claims is down significantly from the record weekly level of more than six million in early April 2020, early in the pandemic, but still above the weekly average of 218,000 in 2019, before Covid-19 spread in the states. United.
‘The pace of layoffs and the new [unemployment] Claims are certainly starting to normalize, but the number of American workers receiving unemployment benefits is still very high, said Marian Wanamaker, associate professor of economics at the University of Tennessee, Knoxville.
The total number of workers collecting unemployment benefits through regular state programs for the week ending May 29 was 3.5 million, a low level for the pandemic but still more than double the levels in late 2019. With federal programs related to the pandemic included, a number of so-called ongoing claims have been 15.3 million in the week ending May 22.
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The latest economic news, analysis and data curated by the days of the week by Jeffrey Sparchot of WSJ.
Pandemic programs end in early September, and 25 states are ending some or all of the boosted benefits early as Republican policymakers worry the benefits are discouraging people from looking for work.
Eight countries will end fringe benefits this weekend. Economists said these steps are likely to further reduce overall benefits in the coming weeks.
The downward trend in unemployment benefits joins other signs that the labor market is improving, including salary gains and a drop in the unemployment rate in May. The pandemic has also caused disruptions, with record job opportunities, a shortage of available workers, and signs that employees are more willing to quit than at any other time in the past two decades.
“This means that employees kind of see better opportunities,” said Don Grimes, an economist at the University of Michigan. “So when layoffs go down and resignations go up, that’s a very strong signal that the labor market is shrinking and it’s largely in favor of employees finding a new job.”
President Biden signed the $1.9 trillion COVID-19 relief bill into law, providing an economic boost to Americans. Gerald F. Seib of the WSJ explains what is in the law and why it’s important to the Biden administration. Photo caption: Laura Kamerman (video from 10/3/21)
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