The number of Americans applying for unemployment benefits dipped slightly last week, a sign the labor market has yet to fire on all cylinders.
Roughly 411,000 people filed jobless claims for the first time in the week ending June 19, the Department of Labor said Thursday. That was down from 418,000 the previous week. Another 105,000 filed for Pandemic Unemployment Insurance, a federal program for self-employed people and gig workers.
“For businesses, labor shortages remain an issue as a ramping up of activity is resulting in supply/demand imbalances,” Rubeela Farooqi, chief U.S. economist with High Frequency Economics, told investors in a research note.
Although the decline in first-time jobless claims has stalled, continuing claims have fallen to their lowest level since March of 2020, when the coronavirus took hold in the U.S.
“[T]hese frictions should ease as health concerns subside, schools reopen and enhanced benefits end,” Farooqi said.
The number of initial claims — a proxy for layoffs — has dropped this year since reaching nearly 1 million a week in January.
U.S. employers added a solid 559,000 jobs in May, with hiring bolstered by renewed consumer spending and business investment as COVID-19 infections decline. Employers posted a record 9.3 million job openings 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 months ahead.
“The summer will be hot for the U.S. economy,” Lydia Boussour of Oxford Economics said in a report Thursday. “As the health situation continues to improve, consumers sitting on piles of savings will give into the urge to splurge on services and experiences they felt deprived off during the pandemic. This will translate into a historic burst in consumption and fuel the fastest annual GDP advance since 1951.”
This is a developing story.