New Jobless Claims Hit Lowest Level Since Pandemic Began

Initial jobless claims for the week ending June 26 dropped 51,000 to 364,000 from the previous week’s level, which was revised up to 415,000, according to the Thursday (July 1) report from the U.S. Department of Labor. The numbers mark the lowest level for new claims since the pandemic took hold, with March 2020 figures at 256,000. 

Continued weeks claimed for benefits in all programs for the week ending June 12 was roughly 14.76, dropping 180,890 from the previous week. By way of comparison, about 32.12 weekly claims were filed during the same time period in 2020.

Extended benefits during the week ending June 12 were available in Alaska, California, Colorado, Connecticut, the District of Columbia, Illinois, Massachusetts, Nevada, New Jersey, New York, Rhode Island and Texas.

Overall, new unemployment claims are down by at least 40 percent since early April, The Wall Street Journal reported. “The big picture is that they are in decline for the long term,” AnnElizabeth Konkel, an economist at the jobs site Indeed, told the WSJ. “When you step back and look at the full graph from when the pandemic started in March 2020, there are sometimes week-to-week differences, but it’s the same broad trend.”

Despite a shortage of workers, unemployment claims had been largely above 400,000 in recent months, but the overall trend is about 50 percent less since the start of this year. New claims in 2019 averaged about 200,000 per week, according to the WSJ. 

About 20 states have dropped or reduced the boost in benefits that started when the pandemic first began in the U.S. in March 2020. The national cutoff is September, but some state authorities have indicated that phasing out the benefits would help spur people to return to the workplace.

“We find that enhanced jobless benefits are an incentive for only a small share of unemployed workers to not find a job,” Oren Klachkin, lead U.S. economist for Oxford Economics, wrote in a note on Wednesday (June 30), per Yahoo! Finance. “The data indicates a tenuous relationship between changes in the number of people receiving supplemental jobless benefits and the number of people sending out resumes or filling out job applications.” 

Almost 50 percent of small and medium-sized businesses (SMBs) are in need of hiring more people. The National Federation of Independent Business (NFIB) indicated that the labor shortage is stalling growth nationwide.