Initial filings for unemployment insurance unexpectedly rose last week, a possible hint that the rapid job growth seen in the first half of 2021 could face hurdles in the months ahead, the Labor Department reported Thursday.
First-time jobless claims totaled 373,000 for the week ended July 3, compared with the 350,000 Dow Jones estimate. The previous week’s level was revised up by 7,000 from 364,000 to 371,000.
The level of continuing claims, the measure of ongoing benefits, decreased to 3.34 million, down 145,000 from the previous week’s revised level.
Despite the uptick in first-time applicants, the decreased number of continuing claims represented the lowest level for insured unemployment since March 2020. The four-week moving average for continuing claims, which smooths weekly volatility, fell by 44,500 to 3.44 million, also the lowest since March 2020.
“While the pace of firings is still above the 200k range we saw pre-Covid, it actually is only slightly above the average seen in the expansion in the mid [2000s] where from ’03-’08 it averaged 335k,” wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group.
“Continuing claims continue to fall as about half the states have gotten rid of expanded benefits and there is clearly a large amount of job openings for the taking with companies utilizing more enticements such as hiring bonuses to bring people back,” he added.
The jobless claims data came less than a week after the government published its much-anticipated June 2021 jobs report, the latest iteration in its monthly updates on the broader U.S. labor market.
Though that report showed nonfarm employers added a better-than-expected 850,000 last month, it also revealed that the U.S. unemployment rate ticked higher to 5.9% compared with the 5.6% estimate.
Federal enhanced benefit programs expire in September, and many states already have halted their own as Covid-19 vaccines are distributed and businesses resume normal activity. However, there are still more than 10 million Americans enrolled in pandemic-related programs.
The total of those receiving benefits through all programs fell by 449,642 to 14.2 million, according to data that runs two weeks behind.