New jobless claims fall to post-pandemic low of 360,000

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The number of new applications for unemployment benefits fell 26,000 last week to 360,000, the Labor Department reported on Thursday.

Thursday’s jobless claims number matched forecasters’ expectations. The number is lower than the week before, which had 386,000 new filings.

The new numbers follow the June jobs report, which beat expectations and found that 850,000 new jobs were added in June, although the unemployment rate slightly increased from 5.8% to 5.9%. The consensus among economists was that 700,000 jobs would be added.

“The current situation with the U.S. economy is truly remarkable. It features what will likely be the strongest annual growth in decades, but currently with a still heightened level of unemployment,” said Mark Hamrick, senior economic analyst at Bankrate, in response to the numbers.

JUNE JOBS REPORT AN IMPROVEMENT BUT ECONOMY STILL LACKING

President Joe Biden hailed the jobs report as “historic progress” and said the United States is emerging from the “worst crisis in 100 years.” He said the economic recovery was a “direct result of the American Rescue Plan.”

Despite the progress, some economists worry that the labor market is being held back by supercharged federal unemployment benefits. Twenty-six states have opted out of the program early, blaming it for offering a more attractive source of income than lower-wage jobs, especially those in the leisure and hospitality industry.

A recent survey found that an estimated 1.84 million workers have declined job offers in favor of collecting unemployment benefits during the pandemic. Almost a third of those receiving unemployment insurance said they had turned down at least one job offer, and of those, 45% said unemployment benefits were a major factor in that decision, according to Morning Consult.

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Inflation is also a concern for economists. Consumer prices increased 5.4% for the year ending June, which represents the highest rate of inflation since 2008.

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