Jobless Claims Fall to Pandemic Low, Underscoring U.S. Rebound

Bloomberg – Applications for U.S. state unemployment insurance fell last week to a fresh pandemic low, indicating that dismissals are easing as business conditions improve and firms look to increase headcounts.

Initial claims in regular state programs decreased by 26,000 to 360,000 in the week ended July 10, Labor Department data showed Thursday. The median estimate in a Bloomberg survey of economists called for 350,000 initial applications.

The drop in new unemployment claims is in line with a broader economic recovery in the U.S., with businesses back to full capacity and demand for travel and leisure surging.

Even so, initial claims remain above pre-pandemic levels and employers continue to point out trouble with finding qualified workers, which could be holding back the pace of the labor market recovery.

“Conditions in the labor market have continued to improve, but there is still a long way to go,” Federal Reserve Chair Jerome Powell told the House Financial Services Committee Wednesday.

“Job gains should be strong in coming months as public-health conditions continue to improve and as some of the other pandemic-related factors currently weighing them down diminish,” he said.

More than half of U.S. governors have announced plans to end enhanced federal unemployment benefit programs early amid an ongoing debate about whether they are holding back job growth.

Lawsuits in some of those states challenging the governors’ legal authority to end the aid could restore the halted benefits or keep them in place until they officially expire in September.

Continuing claims for ongoing state benefits fell to a 3.24 million in the week ended July 3. That could reflect more Americans taking jobs and falling off benefit rolls now that the $300 weekly supplement has ended in many states.

States including Minnesota, Mississippi and Wyoming — which have ended Pandemic Unemployment Assistance for self-employed workers — saw no initial claims in that program last week.

Initial claims in Indiana, Missouri, Tennessee and Texas jumped last week, which could reflect attempts to transition to regular state programs now that PUA has been phased out in those states.

Georgia, Kentucky and Rhode Island reported the biggest declines in initial claims last week.