As the U.S. economy begins to fully reopen after more than a year of lockdowns and layoffs, new unemployment claims declined six weeks in a row. This week, however, new claims have ticked up, according to the Thursday (June 17) report from the Bureau of Labor Statistics (BLS).
Initial claims for the week ending June 12 were 412,000, up 37,000 from the previous week’s level, which was revised down by 1,000 from 376,000 to 375,000.
The biggest uptick in initial claims for the week ending June 5 was Illinois, Delaware and Tennessee. The biggest decline in claims was in Pennsylvania, California, Oklahoma, Texas, and New Jersey.
Economists surveyed by The Wall Street Journal forecast that new claims for the week ended June 12 would come in at 360,000.
“More and more consumer-facing industries that were decimated by the pandemic are coming back online,” Adam Kamins, director of economic research at Moody’s Analytics, told WSJ.
He thinks the normal range for unemployment should be between 200,000 and 250,000, without factoring in recessions, while other economists see a normal range with totals of up to 350,000 a week, WSJ reported.
This week’s unemployment report is the last period that includes federal pandemic benefits in place across all U.S. states. Several states are dropping the additional $300 weekly payment ahead of the September cutoff, Yahoo Finance reported.
Alaska, Iowa, Missouri and Mississippi dropped or reduced the boost in benefits and other states are following suit. One of the motivations in nixing the federal payments is to get more people back into the workforce as labor shortages mount nationwide.
“Most industries are reporting acute labor shortages, but that could even out by fall as the pandemic-era unemployment benefits are phased out and schools reopen allowing parents to return to work,” Anu Gaggar, senior global investment analyst for Commonwealth Financial Network, told Yahoo Finance.
New jobless claims fell below 500,000 on May 6, the first time since the pandemic started.