WASHINGTON (AP) – The number of Americans seeking unemployment benefits rose last week from the lowest point in the pandemic, even as the labor market appears to rebound on the strength of a reopened economy.
The Labor Department said Thursday that jobless claims rose last week to 419,000, the highest number in two months, from 368,000 the week before. The weekly number of first claims, which usually follows layoffs, has declined steadily since it exceeded 900,000 in early January.
Americans are shopping, traveling and eating more as the pandemic wears off, boosting the economy and forcing businesses to seek more workers. Companies posted the the greatest number of jobs available over the two decades the data has been tracked. Hiring has resumed, although companies say they often do not find enough employees at the wages they are willing to pay.
At the same time, analysts are concerned about the potential economic consequences of an increase in confirmed viral infections as the highly contagious delta variant spreads, especially among the unvaccinated. The seven-day moving average in the United States for new daily cases has accelerated over the past two weeks to more than 37,000 on Tuesday, from less than 13,700, according to data from Johns Hopkins University.
Complaints from businesses that they can’t find enough workers have led 22 states to prematurely end a federal unemployment benefit of $ 300 per week, which is on top of state unemployment assistance. Twenty states have terminated their participation in two other federal programs – one of which offers benefits to self-employed and gig workers and another that has served people who have been unemployed for six months or more.
The long-term decline in jobless claims coincides with the acceleration of economic growth. The U.S. economy is believed to have grown rapidly in the April-June quarter as Americans, teeming with cash from stimulus checks and the stock market and home equity, increased their home equity. expenses.
Purchases in retail stores and restaurants increased in June, the government said last week. Retail sales are about 20% above pre-pandemic levels.
The early stoppages in the increase in unemployment assistance have contributed to a steady decline in the number of people receiving unemployment benefits. That number fell to 12.6 million in the week ending July 3, the latest period for which data is available, from 13.8 million the week before.
In the last week of May, before states began to end aid programs, 14.8 million people were receiving some form of unemployment benefit.
The ranks of the unemployed have shrunk as companies have stepped up their hiring. In June, employers added 850,000 healthy jobs, further evidence that reopening the economy was leading to a strong recovery from the pandemic recession.
Employment data for June also suggested that workers had an advantage as companies, desperate to fill positions, offered higher wages. The average hourly wage increased 3.6% from the previous year. That said, the economy still has 6.8 million fewer jobs than before the virus erupted in March last year.
Applications for unemployment assistance are generally considered to be a rough measure of the pace of layoffs. During the pandemic, however, many states were beset by fraudulent claims that skewed the data.
A watchdog report released this week found that states distributed $ 12.9 billion in unemployment benefit overpayments from April 2020 to March, of which about a tenth of the amount was found to be fraudulent. Some of the remaining money may also have involved fraud, but will not be classified as such until investigated.
GAO also found that many unemployed people still had to wait a long time for their jobless claims to be processed and approved. Nationally, about one in ten people who first received benefits in May had waited more than 10 weeks.