On Thursday, the Labor Department reported that initial jobless claims unexpectedly increased last week despite an ongoing recovery in the USA employment market.
First-time filings for unemployment insurance for the week ended on June 12 totaled 412,000, compared with the last week’s 375,000. This is the highest number since May 15.
Economists surveyed by Dow Jones was expecting 360,000 new claims for last week.
According to unadjusted data, all of the rises mostly came from two states Pennsylvania and California with a gain of 21,590 and 15,712 respectively.
As vaccinations have progressed and pandemic cases, hospitalizations, and deaths have reduced significantly, employment was continuing to improve. A year ago, the number of jobless claims was close to 18 million due to the pandemic being at its peak.
Fed Reserve Chairman Powell noted the troubles in getting employees back to filling the 9.3 million available jobs. The Fed in its recent meeting noted progress in the labor market as well as rising inflationary pressures as the Fed indicated that the first wave of interest rate hikes may come sooner than expected. It also indicated Two quarter-point hikes for 2023.
“Factors related to the pandemic, such as caregiving needs, ongoing fears of the virus, and unemployment insurance payments appear to be weighing on employment growth,” Powell said on Wednesday following this week’s meeting of a central bank.
Powell added that “These factors should wane in coming months against a backdrop of rising vaccinations leading to more rapid gains in employment.”