The number of Americans claiming unemployment benefits edged down last week, a sign that the job market has yet to pull all cylinders.
About 411,000 people filed for unemployment for the first time during the week ending June 19, the Labor Department mentionned Thursday. This was down from 418,000 the week before. Another 105,000 have filed for pandemic unemployment insurance, a federal program for the self-employed and co-workers.
“For businesses, labor shortages remain a problem as accelerating activity leads to imbalances between supply and demand,” Rubeela Farooqi, chief economist of the United States, told investors at High Frequency Economics, in a research note.
Although the decline in first jobless claims has stagnated, continued claims have fallen to their lowest level since March 2020, when the coronavirus took hold in the United States
“[T]These frictions are expected to ease as health concerns ease, schools reopen and enhanced benefits end, ”Farooqi said.
The number of initial claims – an indicator of layoffs – has fallen this year since reaching nearly one million per week in January.
While many employers are desperate to hire, some states are starting to cut unemployment assistance programs linked to the pandemic in response to complaints from companies that aid makes it harder for them to find workers.
From this month,unemployment benefit, and 22 of those states will also eliminate unemployment assistance for the self-employed, concert workers, and those without work for more than six months. The additional $ 300 ends nationwide on September 6.
Bank of America economists have estimated that those who earned less than $ 32,000 per year in their previous job may receive more unemployment assistance with the additional $ 300. At the same time, the federal government introduced two unemployment benefit programs last year that covered millions of self-employed and contract workers for the first time.
Four states – Alaska, Iowa, Mississippi and Missouri – stopped paying the $ 300 payment last week. All but Alaska also cut the two programs that covered the self-employed and the long-term unemployed. In Iowa, Mississippi and Missouri, about 163,000 people are no longer receiving unemployment assistance because of the cut.
Forecasters predict ‘hot’ economic growth
U.S. employers created 559,000 solid jobs in May as hiring bolstered by renewed consumer spending and business investment as COVID-19 infections decline. Employers posted a record 9.3 million job postings in April, close to the number of unemployed Americans in the workforce.
Such indicators have many forecasters predicting an acceleration in economic growth in the coming months.
“The summer will be hot for the US economy,” Oxford Economics’ Lydia Boussour said in a report on Thursday. “As the health situation continues to improve, consumers sitting on piles of savings will give in to the urge to splurge on services and experiences they have felt deprived of during the pandemic. a historic explosion in consumption and will fuel the fastest annual growth in GDP since 1951. “
The economy grew at a robust annual rate of 6.4% in the first three months of the year. Some economists believe the country’s gross domestic product could grow at a rate of more than 10% in the second quarter.