The numbers: New applications for unemployment benefits rose slightly last week, but the number of people losing their jobs remains near a pandemic low as companies scramble to add new workers and hold onto to existing ones.
Initial jobless claims rose by 2,000 to 373,000 in the seven days ended July 3, the government said Thursday. These are traditional benefits paid by the states.
Economists surveyed by The Wall Street Journal had forecast new claims would fall to a seasonally adjusted 350,000.
An additional 99,001 applications for benefits were filed through a temporary federal-relief program set up during the pandemic,
The number of people applying for state or federal benefits each week has fallen gradually this year, but they are still more than double the pre-pandemic average. New claims ran in the low 200,000s before the viral outbreak.
Economists predict applications for benefits will fall more rapidly after September once schools reopen and extra unemployment benefits expire.
Big picture: The U.S. economy has made a remarkable recovery this year as more people got vaccinated, governments eased restrictions and Washington pumped trillions of dollars into the economy.
The economy could grow even faster if millions of people who left the labor force after the pandemic went back to work. The unwillingness of so many to reenter of the jobs market has spawned a big debate over the reasons why.
Read: Fewer and fewer people are working full-time from home
Businesses and some economists say extra unemployment benefits have dissuaded many from returning to work, but other experts and surveys of out-of-work Americans point to a wave of early retirements, a lack of child care, and a lingering fear of the coronavirus as bigger factors.
Read: There’s plenty of jobs, but not enough people to fill them. How come?
Also: Job openings hit record 9.2 million, but workers aren’t easy to find
Twenty-six states have cut off extra federal benefits in an effort to push the unemployed to find work, but it’s still too early to tell whether that approach will have a big impact.
The federal benefits are set to expire in all states in September.
The details: New jobless claims rose the most in New York, Pennsylvania and Texas. They fell the most in Puerto Rico, Oklahoma and Maryland.
About half the states saw an increase and half posted a decline.
New claims from two weeks ago were also revised up to 371,000 from a preliminary 364,000, based on more complete information.
The government always has difficulty adjusting new claims for seasonal swings around the July 4 holiday and the annual plant retooling by automakers, a problem compounded by the pandemic.
Read: Fed admits inflation rose much higher than expected, but it still insists price increases are temporary
The number of people already collecting state jobless benefits, meanwhile, fell by 145,000 to a seasonally adjusted 3.34 million in the week ended June 26. These so-called continuing claims slid to a new pandemic low.
Some 5.82 million people who have exhausted state compensation were also getting temporary federal benefits. It was little changed from the prior week.
Altogether, the number of people reportedly receiving benefits from eight separate state and federal programs totaled 14.2 million as of June 19. That’s another pandemic low.
Fewer than 2 million people were getting benefits before the viral outbreak.
Note to readers: A government review found the number of distinct individuals collecting benefits has been inflated by fraud and double counting.
What they are saying? “We have no doubt that the underlying trend will remain downwards,” said chief economist Ian Shepherdson of Pantheon Macroeconomics. “Laying-off staff now is risky, because if business turns out to be better than expected, re-hiring people will be difficult and likely expensive, given the tightness of the labor market.”
Market reaction: The Dow Jones Industrial Average DJIA, +0.30% and S&P 500 SPX, +0.34% were set to fall sharply in Thursday trades.