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The numbers: New applications for unemployment benefits sank by 51,0000 in late June to a new pandemic low of 364,000, underscoring a rapid recovery in the U.S. economy and more aggressive efforts by companies to hire workers.
The decline in new claims was bigger than expected. Economists surveyed by The Wall Street Journal had forecast new claims would drop to a seasonally adjusted 390,000 in the week ended June 26. These are traditional benefits paid by the states.
An additional 115,267 applications for benefits were filed through a temporary federal-relief program set up during the pandemic, the government said Thursday.
The number of people applying for state or federal benefits each week is still more than double the pre-pandemic average.
Some 26 states are cutting off extra federal benefits by early July in an attempt to nudge the unemployed to find work. Economists are watching closely to see if it spurs more people to accept a job, but so far there’s too little evidence to tell.
Read: The U.S. economy is running ‘very hot’, IHS Markit finds, and so is inflation
Big picture: The economy has made a remarkable recovery from the coronavirus, but the pandemic has left a lot of scars. Many people are still afraid to go back to work. Some can’t return to their old jobs because they’ve disappeared. And others still lack options for the care of their kids or elderly relatives.
Extra federal benefits put in place during the pandemic also getting some blame. Businesses contend the money has kept people from accepting job offers because in some cases they can earn more staying at home than by going back to work.
Whatever the case, the federal benefits are set to expire in all states in September. By then, schools, day-care centers and senior-care facilities are likely to be fully open and allow most people to go back to work.
Read: Now hiring: U.S. seen adding 700,000 jobs in June
Note to readers: A government review found the number of distinct individuals collecting benefits has been inflated by fraud and double counting.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to higher in Thursday trades.
