Jobless claims tick down after first increase since April

Jobless claims tick down after first increase since April
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The number of new applications for jobless aid dropped slightly last week to 411,000, the Labor Department reported Thursday.

In the week ending June 19, seasonally adjusted initial claims for unemployment insurance dropped by 7,000 from the previous week’s revised total of 418,000. Last week’s drop followed the first increase in jobless claims since April.

Another 104,682 workers applied for Pandemic Unemployment Assistance, a jobless aid program for gig workers, contractors and others who don’t qualify for traditional unemployment insurance, an increase of 6,920 applications from the prior week.

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The four-week moving average for claims also rose after last week’s modest reduction in claims, which have fallen slowly since May. Even so, experts say that the plateau may be little more than a statistical quirk driven by volatile data.

“I wouldn't worry too much about the deceleration yet,” said Daniel Zhao, senior economist at Glassdoor, in a Twitter thread. He pointed to a sharp spike in weekly claims from Pennsylvania, which rose from 30,000 to 44,000 last week.

“That's an unusually large increase which may recede in coming weeks.”

But Zhao said a slowdown in the decline of continuing claims was “unusual” after months of job gains. The non-seasonally adjusted number of Americans on some form of jobless aid totaled 14,845,450 in the week ending June 5, rising 3,756 from the previous week.

Jobless claims are expected to decrease sharply in the coming weeks, with 26 states set to drop out of expanded unemployment aid programs extended by President BidenJoe BidenTrump hails Arizona Senate for audit at Phoenix rally, slams governor Republicans focus tax hike opposition on capital gains change Biden on hecklers: 'This is not a Trump rally. Let 'em holler' MORE in March. Those programs are set to expire in September, but more than two dozen Republican governors set earlier deadlines in their states following months of uninspiring job gains.

Even so, the apparent plateau in claims could boost political pressure on Biden to cut off expanded benefits sooner. Republican lawmakers and right-leaning economists have blamed generous unemployment aid for a record-high 9.2 million job openings that have gone unfilled.

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"While this might be a short-term fluke, it could also be early proof that Biden is creating a culture of dependency, fifteen months after these benefits started," said Alfredo Ortiz, president and CEO of the Job Creators Network, a conservative nonprofit.

Many other economists, however, say the hiring slowdown and persistence of higher jobless claims reflect other pandemic-related constraints on the economy.

“I think we'll see strong job creation in the fall, I really do,” Federal Reserve Chairman Jerome Powell told lawmakers during a Tuesday hearing in the House.

"It may just be that it's hard to match up with a new job and people feel like they can wait a little bit longer and really shop carefully,” Powell added.