Jobless Claims Taper Off but Still Paint Bleak Picture

The number of individuals filing for first-time jobless claims tapers off, though those filing for unemployment insurance over the past four months nears 50 million.
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Individuals filing for first-time jobless claims remains in the millions, weekly government figures released on Thursday showed, as the number of Americans filing for unemployment insurance over the past four months neared 50 million.

The Labor Department said Thursday that 1.314 million Americans filed jobless claims for the week ended July 3, down slightly from the revised 1.413 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 various states and cities.

Economists polled by FactSet had been expecting 1.375 million claims up to last Saturday.

Continuing claims, which is the number of people not just filing but staying on unemployment benefits, came in at 18.062 million for the week ended June 27. The continuing claims numbers are reported with a one-week lag, but are considered a better gauge of the labor market.

"Positive momentum when it comes to jobs is nothing if not a good thing, but let’s keep in mind that while firings have slowed we’re still at an extremely elevated level," said Mike Loewengart, Managing Director, Investment Strategy with E*TRADE Financial.

"And not all sectors have been hit the same—with airlines, retailers, and hospitality announcing unprecedented furloughs, the overall labor market is still anemic," Loewengart added. "Amid a pandemic that continues to spread here in the U.S., we should take any seemingly positive jobs read with a massive grain of salt."

Some signs of economic growth have emerged, including a June surge in hiring that took both Wall Street and Main Street by surprise. However, an uptick in new Covid-19 infections and hospitalizations in recent few weeks in states including Florida, Texas, Arizona and California continues to level doubt on whether businesses are opening too soon, in turn raising the specter that companies may continue to push off hiring plans.

Through the week ended June 20, 47 states reported 14.363 million individuals claiming Pandemic Unemployment Assistance benefits and 41 states reported 850,461 individuals claiming Pandemic Emergency Unemployment Compensation benefits.

The largest increases in initial claims for the week ended June 27 were in Michigan (+18,668), Indiana (+15,496), Texas (+7,046), Virginia (+6,662), and Kentucky (+5,794), while the largest decreases were in Oklahoma (-40,208), Florida (-11,313), Maryland (-9,926), Georgia (-8,240), and California (-7,132).