People who lost their jobs wait in line to file for unemployment benefits, following an outbreak of the coronavirus disease , at Arkansas Workforce Center in Fort Smith, Arkansas, U.S.
Still, the weekly jobless claims report from the Labor Department on Thursday, showed more people are returning to work, a trend that bodes well for July’s employment report.
Initial claims for state unemployment benefits increased 51,000 to a seasonally adjusted 419,000 for the week ended July 17, the highest level since mid-May.
Though economists do not expect large-scale business shutdowns similar to 2020, the latest wave of infections poses a risk to the economy.
Some of the rise in claims likely reflects difficulties smoothing the data for seasonal fluctuations following the upheaval from the pandemic.
Claims data have been muddied by the federal government’s expansion of benefits to people who do not qualify for the regular state programs. People have to apply for state programs to determine eligibility for federal benefits.
But the unemployed are returning to work.
Evidence is mixed on whether the early termination of federal benefits, which started on June 12 and will run through July 31, is encouraging job searches.
“We expect the downward trend in continuing claims will gather momentum as top-off benefits end in all states in early September and other constraints on labor supply including lack of childcare recede,” said Nancy Vanden Houten, lead U.S.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day.