US unemployment claims rise to 419,000 from a pandemic low

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CHICAGO (NewsNation Now) — The number of Americans seeking unemployment benefits rose last week from the lowest point of the pandemic, even as the job market appears to be rebounding on the strength of a reopened economy.

The Labor Department said Thursday that jobless claims increased by 51,000 from the previous week to 419,000. The weekly number of first-time applications for benefits, which generally tracks layoffs, has fallen steadily since topping 900,000 in early January.

The rise in claims likely reflects difficulties smoothing the data for seasonal fluctuations following the upheaval from the COVID-19 pandemic. In normal years, layoffs are usually expected to decline in the second half of July.

Americans are shopping, traveling and eating out more as the pandemic has waned, boosting the economy and forcing businesses to scramble for more workers. Companies have posted the highest number of available jobs in the two decades that the data has been tracked. Hiring has picked up, though businesses say they often can’t find enough employees at the wages they’re willing to pay.

At the same time, analysts are becoming concerned about the potential economic consequences of a tick-up in confirmed viral infections as the highly contagious delta variant spreads, especially among the unvaccinated. The seven-day rolling U.S. average for daily new cases accelerated over the past two weeks to more than 37,000 as of Tuesday, from fewer than 13,700, according to data from Johns Hopkins University.

Complaints by companies that they can’t find enough workers have led 22 states to prematurely end a $300-a-week federal unemployment benefit, which comes on top of state jobless aid. Twenty states have ended their participation in two other federal programs — one of which provides benefits to the self-employed and gig workers and another that serves people who have been out of work for six months or longer.

Officials in two other states — Indiana and Maryland — had sought to end the supplemental aid programs but were blocked by court rulings. Nationally, the programs will all expire in early September.

“The total number of individuals on some form of unemployment assistance remains historically elevated at nearly 12.6 million,” said Mark Hamrick, senior economic analyst at Bankrate. “But that total should decline sharply in a couple of months as the federal pandemic programs expire.”

The long-term decline in applications for jobless aid coincides with accelerating economic growth. The U.S. economy is thought to have expanded briskly during the April-June quarter as Americans, flush with cash from stimulus checks and from the stock market and home equity, stepped up their spending.

Purchases at retail stores and restaurants rose in June, the government said last week. Retail sales are roughly 20% above pre-pandemic levels.

The Associated Press and Reuters contributed to this report.

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