New weekly jobless claims resumed declining last week but by a smaller than expected margin, underscoring the still-choppy recovery in the U.S. labor market.
The Department of Labor released its weekly report on new jobless claims on Thursday at 8:30 a.m. ET. Here were the main metrics from the report, compared to consensus data compiled by Bloomberg:
Initial jobless claims, week ended June 19: 411,000 vs. 380,000 expected and an upwardly revised 418,000 during prior week
Continuing claims, week ended June 12: 3.390 million vs. 3.460 million expected and an upwardly revised 3.534 million during prior week
At 411,000 jobless claims still above their pandemic-era low of 375,000 and the 2019 average of just over 200,000 new claims per week. The previous week's unexpected increase in new jobless claims had ended a six-week streak of improvements in initial filings. But overall, initial filings have been unambiguously on the decline, with broader business reopenings from New York to Los Angeles helping stoke economic activity and demand for labor.
“I see a labor market that continues to recover week after week, month after month,” Heather Boushey, White House Council of Economic Advisers member, told Yahoo Finance Live on Thursday. “The data are volatile, so we don’t make too much of anyone week or one month trend.”
Still, Thursday's report marks reflects a back-to-back week with new jobless claims above the psychologically important 400,000 level. The four-week moving average for new claims also moved up slightly, rising by 1,500 to 397,750.
"While progress in claims filings may have stalled in recent weeks, the change has been subtle so resist the urge to read too much into it or characterize things as getting worse," Greg McBride, Bankrate's chief financial analyst, wrote in an email. "Continuing claims, after all, did move slightly lower, and are at the lowest since the onset in March 2020."
Continuing jobless claims, reported on a one-week lag, sank to the lowest level since March 21, 2020, coming in at just under 3.4 million.
"Economic reopening and a strengthening labor market should lead to renewed declines in unemployment filings, with the summer months promising to bring us closer to the normal we’ve all been craving," McBride added.
Issues in the labor market have now primarily been on the supply rather than demand side, and a plethora of companies have cited difficulties in finding workers to fill job openings. In the service sector, the rate of job creation was the slowest in three months in early June, according to data from IHS Markit.
Thursday's report also marks the first following the early phaseout of federal enhanced unemployment benefits across numerous states. On June 12, Alaska, Iowa, Missouri and Mississippi became the first states to significantly reduce or fully slash enhanced federal unemployment benefits ahead of their official, national September expiration date.
And on June 19, another eight states — Alabama, Idaho, Indiana, Nebraska, New Hampshire, North Dakota, West Virginia and Wyoming — also conducted their own phaseouts of these unemployment benefits. The states that have opted for these early phase-outs have done so with the hope of incentivizing workers to rejoin the labor force. Many economists, however, have suggested a confluence of other factors, including childcare difficulties and concerns over getting sick have, have also impacted labor supplies.
The early end to these unemployment benefits may eventually bring down the total number of claimants reported across all programs, which was at 14.8 million as of the week ended June 5 for a slight uptick from the prior week. This has more than halved compared to the 31.3 million individuals reported during the same week last year, but is still highly elevated on a historical basis. Most of these comprised workers claiming benefits through the federal Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation programs, at a combined 11.2 million.
The vast majority of states reported declines in new jobless claims last week on a seasonally unadjusted basis, suggesting most of the country is still making strides in keeping workers on payrolls as economic activity picks up.
Of the handful of states that did post increases in new claims last week, Pennsylvania saw by far the most. The state's new jobless claims increased by 14,500 last week to a total of just over 44,000, contributing significantly to last week's persistently elevated print.
Meanwhile, a handful of states and territories still posted high insured unemployment rates, or proportion of those claiming benefits to total state population. The Virgin Islands had the highest insured unemployment rate at 19.5% during the week ended June 5 at 19.5%, following by a wide margin by Rhode Island and Nevada at 4.8% and 4.5%, respectively.
Overall, the national insured unemployment rate was 2.4% during the week ended June 5.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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