Jobless claims preview: New filings likely fell to pandemic-era low of 350,000
New weekly jobless claims are expected to set a new pandemic-era low for a second straight week, trending lower after a brief jump in June.
The Department of Labor is set to release its weekly report on new jobless claims Thursday at 8:30 a.m. ET. Here are the main metrics expected from the report, compared to consensus data compiled by Bloomberg:
Initial jobless claims, week ended July 3: 350,000 expected vs. 364,000 during prior week
Continuing claims, week ended June 26: 3.350 million expected vs. 3.469 million during prior week
Initial unemployment claims have been on the decline for months now, as vaccinations enabled re-openings that in turn fueled a need for workers across industries to keep up with consumer demand. New jobless claims are now coming in at about half the level from the beginning of 2021, and have plummeted compared to the more than 1 million claims coming in per week this time last year.
But Americans are still filing more first-time unemployment claims than they did in 2019, when new claims averaged just over 200,000 per week. And an elevated nearly 14.7 million Americans were still claiming some form of either state or federal unemployment benefits as of mid-June.
At the same time, companies have kept reporting labor supply challenges, even as millions of individuals remain on the sidelines of the workforce. The Labor Department reported Wednesday that job openings rose to a record 9.2 million in May, the latest date for which data is available. And the employment subindices in the Institute for Supply Management's services and manufacturing reports slid into contractionary territory for the first time in months in June, reflecting the strain from labor scarcities.
"This has been a recession like no other with the record levels of job openings calling into question the claims of Washington policy officials that additional stimulus is still needed to aid the recovery," Chris Rupkey, chief economist at FWDBonds, wrote in an email on Wednesday. "We are faced with two conflicting data sources one that says millions are unemployed and still out of work from the recession and the other saying job openings are in the millions, record levels which we ordinarily only see when the economy is experiencing a boom."
Many economists are bracing for a summer of choppy labor market data, with seasonal adjustments compared to last year's pandemic-impacted reports and the early phase-out of federal enhanced unemployment benefits in some states creating bumpiness in the data. Twenty-six states have opted to end federal unemployment assistance before the official early September expiration date. These early program ends began June 12 and will continue on a staggered basis through early August.
"Parsing through the data for genuine improvement from reopening versus suspension of benefits effects will be difficult," Rubeela Farooqi, chief U.S. economist for HFE Economics, wrote in a note. "Enhanced benefits have been widely cited as a reason for labor shortages that a range of companies continue. to report. But those shortages appear to have been less of an issue in June, evident in the 850K rise in payrolls."
This post will be updated with the results of the Labor Department's weekly jobless claims report Thursday morning at 8:30 a.m. ET. Check back for updates.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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