The numbers: New claims for traditional unemployment benefits continued a slow and steady decline in late June, moving in the right direction, but at a slow pace showing that the labor market is still struggling to recover after the biggest wave of layoffs in the United States history.
Initial jobless claims, a rough measure of layoffs, fell to 1.43 million in the seven days ended June 27 from 1.48 million in the previous week, the Labor Department said Thursday. The figures are seasonally adjusted.
Economists surveyed by MarketWatch had forecast 1.40 million new claims. These figures reflect the applications normally submitted through state unemployment offices.
Read: In the last dark turn of the pandemic, companies appear to be cutting wages
Last week, an additional 839,563 people applied for benefits through a temporary federal aid program.
Meanwhile, the number of people receiving traditional unemployment benefits increased 59,000 in the week ending June 20 to 19.29 million. These are known as continuous claims. This is the first increase after three consecutive weekly declines, and could be a sign that progress in the job market is stagnating.
Read:Consumer confidence jumps to 3-month high, but still well below pre-crisis levels
What happened: New jobless claims have gradually receded as Americans return to work and the economy reopens. However, millions have not yet been able to return to their old jobs and some have little chance of doing so, especially in industries such as travel and tourism.
In the separate June monthly employment report also released Thursday due to the July 4 holiday, the government said 4.8 million new net jobs were created or restored. However, the United States lost more than 22 million jobs in March and April, during the height of the pandemic.
The unemployment rate fell to 11.1% in June from 13.3% the previous month. The data was stronger than expected.
Economists contend that the monthly employment report presents a more accurate picture of the job market than weekly new unemployment claims. States have been overwhelmed by the requests, including many duplicate claims, and some like Kentucky have been delayed in processing the requests that were filed weeks or months ago.
More than 50 million new claims have been filed since mid-March. Before the crisis, states processed fewer than 225,000 claims per week.
See: Marketwatch Coronavirus Economic Recovery Tracker
Big picture: The economy experienced a huge jolt of adrenaline once states began to reopen. What follows is less easy to determine, especially after a new outbreak of coronavirus cases in states like Texas, Florida and California that were among the first to relax the restrictions. Since then, other states like New York have decided to slow down on reopening.
What the latest outbreak underscores, economists say, is that the way to recovery depends largely on whether the virus is controlled and treatments are discovered. They forecast more hurdles as consumers and businesses navigate an uncertain future.
What are they saying? “This report confirms that while activity may have recovered strongly in the early phase of recovery, the rebound in employment has been slow. The healing process will be a multi-year development with negative risks of new infections,” said Nancy. Vanden Houten, economist at Oxford Economics.
Market reaction:The Dow Jones Industrial Average DJIA,
and S&P 500 SPX,
They rose in Thursday’s exchanges on the strong jobs report.
.
