The number of Americans filing for unemployment insurance over the past four months neared 50 million as first-time jobless claims continued to rise, weekly government figures released on Thursday showed.
The Labor Department said Thursday that 1.3 million Americans filed for jobless claims for the week ended July 11, down slightly from the revised 1.314 million claims for the week earlier, as U.S. employers continued efforts to reopen and rehire, even as the coronavirus continued to flare up in across various states and cities.
Economists polled by FactSet had been expecting 1.25 million claims up to last Saturday.
"It’s disappointing to see labor market gains moderate as we’re still far away from pre-pandemic levels," said Mike Loewengart, Managing Director, Investment Strategy with E*TRADE Financial. "With coronavirus cases ticking up, the market could be in limbo until we get a clear sign on unemployment aid and some meaningful news on the vaccine front."
Indeed, while some signs of economic growth have been emerging including an increase in retail sales last month, an uptick in new Covid-19 infections and hospitalizations over the past few weeks has cast doubt on whether some businesses are opening too soon, in turn raising the specter that companies may continue to push off rehiring plans.
Additional signs of a relapse in hiring and a corresponding increase in claims are on the way, with companies including American Airlines (AAL) - Get Report warning of thousands of potential job cuts in the coming months, though the carrier is looking to extend $32 billion in federal aid to keep employees on the payroll.
Continuing claims, which are the number of people not just filing but staying on unemployment benefits, came in at 17.338 million for the week ended July 3. The continuing claims numbers are reported with a one-week lag, but are considered a better gauge of the labor market.
Through the week ended June 27, 48 states reported 14.283 million individuals claiming Pandemic Unemployment Assistance benefits and 44 states reported 936,431 individuals claiming Pandemic Emergency Unemployment Compensation benefits.
The number of applications for benefits has slowly decreased from a late March peak of close to 7 million but still remains well above anything seen in history - roughly 1.5 million a week in recent weeks.