WASHINGTON: New applications for unemployment benefits fell last week to 364,000, according to government data released on Thursday, the lowest since March 14, 2020 when the pandemic lockdowns began.
That was a decline of 51,000 new jobless claims for the week ended June 26, according to the seasonally adjusted Labor Department figures.
The decline was far better than economists had expected but analysts warn the figures are volatile and subject to unexpected moves.
Still, the drop came as several US states have terminated supplemental unemployment benefits early amid concerns the payments are keeping workers on the sidelines as businesses struggle to fill open positions.
But claims for special aid for freelance workers not eligible for regular benefits – Pandemic Unemployment Assistance – rose by nearly 3,500 to 115,267 in the week, the report said.
As the US economic reopening has gathered momentum amid widespread vaccinations, the four-week moving average for initial claims continued its downward trajectory, dipping to 392,750 – compared to 1.5 million in the same week of 2020.
Ian Shepherdson of Pantheon Macroeconomics said the figures could be skewed by annual closures in auto factories.
“It’s possible, then, that the recent data signal a slowing in the trend rate of decline in claims, but these numbers are noisy and we aren’t going to rush to judgment on the back of such a short run of data,“ he said in an analysis.
However, there were still 14.7 million people receiving some form of benefits as of June 12, although that was less than half the 32 million total a year earlier, according to the report.
In other economic news, according to a private survey released on Thursday, activity at US factories continued to expand in June but at a slower pace as industry struggles to meet demand amid supply issues
Even as the US economic rebound continues, hiccups following the Covid-19 pandemic shutdowns were apparent across sectors, including getting raw materials and finding workers, according to the Institute for Supply Management's (ISM) monthly survey.
ISM's manufacturing index slipped six-tenths to 60.6%, the lowest since January but still reflecting strong growth. Anything above the 50% threshold indicates growth.
New orders also fell but production jumped 2.3 points to 60.8%, the survey showed.
However, the employment index fell to 49.9%, pointing to a slowdown in hiring after six straight months of increases.
Respondents “reported that their companies and suppliers continue to struggle to meet increasing levels of demand,“ ISM survey chief Timothy Fiore said, noting long lead times, rising prices and some “wide-scale shortages of critical basic materials.”
In addition, he warned that “worker absenteeism, short-term shutdowns due to parts shortages, and difficulties in filling open positions continue to be issues that limit manufacturing-growth potential.”
But the mood among executives was upbeat as 17 of the 18 sectors surveyed were growing and none declined.
“Other than material availability/volatility and rising prices, the outlook for our company is good. We can’t keep up with the increase in orders,“ one furniture industry executive said. – AFP
Source: The Sun Daily
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