Last week, applications for U.S. state unemployment claims fell to a new pandemic low. This indicates that firms are looking to increase their headcounts and business conditions are improving.
In the week ending July 10, Labor Department data revealed that initial claims for regular state programs fell by 26,000 to 360,000. A Bloomberg survey of economists found that 350,000 applications were needed for initial applications.
This is consistent with the wider economic recovery in the U.S. with businesses returning to full capacity and travel and leisure demand soaring.
Despite this, initial claims are still higher than pre-pandemic levels. Employers continue to complain about difficulty finding qualified workers. This could slow down the pace of labor market recovery.
Jerome Powell, Federal Reserve Chair, stated Wednesday that although conditions in the labor market have improved, there is still much to do.
He stated that job gains will be strong as the public-health situation improves and some of other pandemic-related factors diminish.
More than half the U.S. governors announced plans to eliminate enhanced federal unemployment benefits programs before the end of this year amid ongoing debate over whether or not they are limiting job growth.
Some states could file lawsuits challenging the governors’ authority to stop the aid. These lawsuits could either restore the benefits or keep them in effect until September.
In the week ending July 3, continuing claims for state benefits dropped to 3.24 million. This could be due to more Americans getting jobs and being removed from benefit rolls after the $300 weekly supplement in many states has ended.
Minnesota, Mississippi, and Wyoming have all ended Pandemic Unemployment Aid for self-employed workers. Last week saw no initial claims.
Initial claims in Indiana and Missouri, Tennessee, and Texas rose last week. This could be a result of attempts to transition to regular state programmes now that PUA is no longer available in these states.
Last week, initial claims declined in the most affected states: Georgia, Kentucky and Rhode Island.
