New claims for US unemployment benefits unexpectedly rose back above 400,000 last week from a pandemic-era low, though the labour market is expected to improve as vaccinations increase and lockdown measures ease.
The pace of jobless claims filed for regular state programmes rose by 37,000 in the week ending June 12 to 412,000, the US labour department said on Thursday. That was the first increase since April and missed expectations for a drop to 359,000 new claims, according to a Reuters survey of economists.
Pennsylvania and California reported the biggest increases in jobless benefits last week, according to preliminary figures.
The report also showed an increase of 46,722 in claims for federal pandemic unemployment assistance — which provides benefits for the self-employed and gig workers — to 118,025.
The federal pandemic-related jobless benefits are set to expire September 6, and more than two dozen states have said they will end some or all of the enhanced benefits early as Republican policymakers argue that the benefits are discouraging people from seeking work.
Federal Reserve chair Jay Powell on Wednesday struck an optimistic tone about the pace of job creation.
“There’s every reason to think that we’ll be in a labour market with very attractive numbers, with low unemployment, high participation and rising wages across the spectrum,” he said at a press conference.
Labour market conditions are expected to continue to improve as the US pushes ahead with reopening, with California, the most populous US state, and New York both lifting most of their coronavirus restrictions this week.
While the median of Fed officials’ estimates continued to show unemployment dropping to 4.5 per cent this year, they now signal GDP growth of 7 per cent, compared with 6.5 per cent previously.
About 14.8m Americans continue to seek unemployment benefits more than a year after the pandemic began.
Following the data the Treasury yields fell slightly, with the yield on the US 10-year down 0.007 percentage points to 1.563 per cent. Meanwhile, stock futures trimmed their losses with S&P 500 futures down 0.3 per cent.