The U.S. Department of Labor reports another week of declining initial unemployment claims.
In the week ending June 26, the advance figure for seasonally adjusted initial claims was 364,000, a decrease of 51,000 from the previous week’s revised level. This is the lowest level for initial claims since March 14, 2020 when it was 256,000. The previous week’s level was revised up by 4,000 from 411,000 to 415,000. The 4-week moving average was 392,750, a decrease of 6,000 from the previous week’s revised average. This is the lowest level for this average since March 14, 2020 when it was 225,500.
The Associated Press reports,
Applications for unemployment benefits have fallen more or less steadily since the year began. The rollout of vaccines has sharply reduced new COVID-19 cases, giving consumers the confidence to shop, travel, eat out and attend public events as the economy recovers.
All that pent-up spending has generated such demand for workers, notably at restaurants and tourism businesses, that many employers have been struggling to fill jobs just as the number of posted openings has reached a record high. But many economists expect hiring to catch up with demand in the coming months, especially as federal unemployment aid programs end and more people pursue jobs.
The Wall Street Journal reports,
Jobless claims, a proxy for layoffs, are down by about 50% since the first week of April, but remain above pre-pandemic levels.
“The big picture is that they are in decline for the long term,” said AnnElizabeth Konkel, an economist at job-search site Indeed, referring to new claims totals.
“When you step back and look at the full graph from when the pandemic started in March 2020, there are sometimes week-to-week differences, but it’s the same broad trend,” Ms. Konkel said.
And this suggests hiring will pick up shortly.
The number of people receiving benefits is projected to decline over the summer as the labor market continues to improve and states cancel enhanced and extended pandemic-related benefits. Twenty-two states in June ended participation early in federal programs that are set to expire in early September. Four more are expected to do so in July.
“When you have extended unemployment benefits, what you’re slowing down is the speed at which people are looking for a job, not really whether they’re looking for work or not,” said Alfredo Romero, an economist at North Carolina A&T State University. He added that as the federal benefits fade, “we’re gonna see an increasing match of vacancies with people looking for jobs.”
We hope so.