New weekly applications for jobless benefits rose unexpectedly last week, according to data released Thursday by the Labor Department.

In the week ending July 3, the seasonally adjusted number of initial claims for unemployment insurance totaled 373,000, rising 2,000 above the previous week’s revised total of 371,000.

Another 99,001 people applied for Pandemic Unemployment Assistance (PUA), a program created in March 2020 to expand jobless aid to gig workers, contractors and others who don’t qualify for traditional unemployment benefits. Twenty-six states have pulled out of the program, which expires in September.

Democratic lawmakers have criticized Republican governors for pulling their states out of expanded jobless benefit programs such as PUA and the $300 weekly increase approved by President Biden in March. GOP lawmakers counter by blaming Biden’s extension of jobless aid on recent hiring struggles, but economists say there are several different issues keeping potential workers on the sidelines.

It is unclear how much of the increase in jobless claims came from PUA recipients attempting to switch into traditional jobless benefits, which could increase the total even if those applications are eventually denied.

Economists and government auditors have also warned that jobless claims data is highly vulnerable to being distorted by state-level processing errors, fraud and inconsistency.

Even so, the lack of a bigger decline in jobless claims as employment growth picks up has puzzled some analysts, who expected a sharper exit from unemployment rolls.

“These figures are proving extremely stubborn and are only falling very slowly. The high number of initial claims is puzzling, given that layoffs are at a record low. And the very stable number of total beneficiaries suggests that once people are on benefits, they don’t leave,” said Julia Pollack, labor economist at ZipRecruiter, in an analysis posted to Twitter.

As of June 19, the most recent week for which data is available, there were more than 14.2 million Americans on some form of jobless aid. That number has declined drastically from 33.2 million a year ago, but has fallen at a much slower rate in recent weeks.

“We expect the downward trend in continuing claims will gather momentum as initial claims work their way lower and constraints on labor supply, including health concerns, lack of child care and enhanced unemployment benefits, fade,” wrote Nancy Vanden Houten of Oxford Economics.

Updated at 10:28 a.m.

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