US initial jobless claims spike after hitting record low

Washington: Initial unemployment claims in the US increased to 373,000 last week, after hitting the lowest level since the onset of the Covid-19 pandemic, the Labour Department reported.

In the week ending July 3, the number of Americans filing for unemployment benefits increased by 2,000 from the previous week’s upwardly revised level of 371,000, according to a report released on Thursday by the Department’s Bureau of Labour Statistics.

The four-week moving average, a method to iron out data volatility, edged down by 250 to 394,500, Xinhua news agency quoted the report as saying.

It also revealed that the number of people continuing to collect regular state unemployment benefits in the week ending June 26 decreased by 145,000 to reach nearly 3.34 million.

That number peaked in April and May last year, when it was over 20 million.

Meanwhile, the total number of people claiming benefits in all programs, state and federal combined, for the week ending June 19 also decreased by 449,642 to reach 14.2 million, as the country continues to grapple with the fallout of the pandemic.

Over 20 states, nearly all of which are Republican-led, previously announced plans to end the $300 weekly federal unemployment benefits in June or July, weeks ahead of their expiration date of September 6, citing labour shortage.

Last spring, as Covid-19 shutdowns rippled through the workforce, initial jobless claims spiked by 3 million to reach a record 3.3 million in the week ending March 21, 2020, and then doubled to reach a record 6.87 million in the week ending March 28.

After that, the number, though at record highs, has been declining overall, but the trend was reversed multiple times amid resurgences and a bumpy economic recovery.

Initial jobless claims unexpectedly rose to an upwardly revised level of 418,000 in the week ending June 12 after hitting pandemic lows in prior weeks, marking the highest level in a month – a recent example to illustrate the twists and turns in labour market recovery.