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U.S. demand for unemployment benefits was again unexpectedly above 400,000 last week, from a pandemic-era low, although the labor market is expected to improve in as vaccinations increase and blockade measures are facilitated.
The pace of unemployment claims filed by regular state programs rose by 37,000 the week ending June 12 to 412,000, the U.S. Department of Labor said Thursday. This was the first increase since April and lost expectations of a drop to 359,000 new claims, according to a survey of Reuters economists.
Pennsylvania and California saw the largest increases in unemployment benefits last week, according to preliminary data.
The report also showed a 46,722 increase in pandemic unemployment assistance claims (providing benefits for the self-employed and workers) to 118,025.
Federal pandemic-related unemployment benefits will expire Sept. 6, and more than two dozen states have said they will end some or all of the improved benefits before Republican policymakers argue that the benefits discourage people from looking for work.
Chair of the Federal Reserve Jay Powell Wednesday gave an optimistic tone about the pace of job creation.
“There is every reason to think that we will be in a job market with a very attractive number, with low unemployment, high participation and rising wages across the spectrum,” he said at a news conference.
Labor market conditions are expected to continue to improve as the United States moves forward with reopening, as California, the most populous U.S. state and New York will lift most of its coronavirus restrictions this week.
While the average of Fed officials ’estimates continued to show that unemployment fell to 4.5% this year, it now points to 7% GDP growth, compared to the previous 6.5%.
Some 14.8 million Americans continue to seek unemployment benefits more than a year after the pandemic began.
Following the data, Treasury yields fell slightly, with a 10-year U.S. yield falling 0.007 percentage points to 1.563 percent. Meanwhile, equities futures reduced their losses with the S&P 500 futures down 0.3%.
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