Initial Claims Rise Unexpectedly

Initial claims for unemployment insurance rose unexpectedly last week, signaling a potentially volatile period ahead as more than half of U.S. states end government-funded unemployment programs.

The Labor Department on Thursday said for the week ending July 3, the advance figure for seasonally adjusted initial claims rose to 373,000, an increase of 2,000 from the previous week’s level, which revised up by 7,000 from 364,000 to 371,000. The four-week moving average fell to 394,500, a decrease of 250 from the previous week’s revised average to the lowest level for this average since March 14, 2020, when it was 225,500.

Claims are well down from the record 6.149 million in early April 2020, but analysts said the current number remains above the 200,000-250,000 range associated with a healthy labor market.

The advance seasonally adjusted insured unemployment rate fell to 2.4 percent for the week ending June 26, a decrease of 0.1 percentage point from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending June 26 fell to 3,339,000, a decrease of 145,000 from the previous week’s revised level; this is the lowest level for insured unemployment since March 21, 2020, when it was 3,094,000. The previous week’s level revised up 15,000 from 3,469,000 to 3,484,000. The four-week moving average fell to 3,440,750, a decrease of 44,500 from the previous week’s revised average; this is the lowest level for this average since March 21, 2020, when it was 2,071,750.

The report said the advance number of actual initial claims under state programs, unadjusted, totaled 369,661 in the week ending July 3, an increase of 3,147 (0.9 percent) from the previous week. The seasonal factors had expected an increase of 1,582 (0.4 percent) from the previous week. Labor reported 1,391,178 initial claims in the comparable week in 2020. In addition, for the week ending July 3, 47 states reported 99,001 initial claims for Pandemic Unemployment Assistance.

The advance unadjusted insured unemployment rate fell to 2.3 percent during the week ending June 26, a decrease of 0.1 percentage point from the prior week. The advance unadjusted level of insured unemployment in state programs totaled 3,236,197, a decrease of 49,110 (-1.5 percent) from the preceding week. The seasonal factors had expected an increase of 95,409 (2.9 percent) from the previous week. A year earlier the rate was 11.4 percent and the volume was 16,611,272.

The report said the total number of continued weeks claimed for benefits in all programs for the week ending June 19 fell to 14,209,007, a decrease of 449,642 from the previous week. Labor reported 33,228,122 weekly claims filed for benefits in all programs in the comparable week in 2020.

Analysts said volatility remains likely ahead, as 25 states with mostly Republican governors withdraw federal government-funded unemployment programs.