Initial jobless claims fell sharply last week, suggesting a continued improvement in the US labor market, the Labor Department reported Thursday.
For the week ending June 26, initial jobless claims were 364,000, compared to the Dow Jones estimate of 390,000. That marked a new pandemic-era low and a 51,000 drop from the previous week.
The last time there were fewer claims occurred in the week of March 14, 2020, shortly before the worst economic damage occurred.
The report comes a day before the government releases its highly anticipated non-farm payroll for June. That is projected to mean an increase from 706,000 from 559,000 in May and a decrease in the unemployment rate to 5.6%. The latest data will not be included in the Bureau of Labor Statistics June numbers as it falls outside of the survey week used for the report.
Employment has been booming over the past year, although growth has slowed recently as around 7 million workers who had jobs prior to the Covid-19 pandemic remain inactive.
Despite the decline in weekly claims, the number of permanent claims rose to 3.47 million, 56,000 more than in the previous week. However, this data is a week behind the headline and likely represents the unexpected rebound in the previous week’s count.
The four-week moving average for sustained claims, which smooths out weekly volatility, fell 75,000 to 3.48 million, its lowest level since the week of March 21, 2020.
The total number of beneficiaries across all programs decreased by 180,890 to 14.66 million after a two-week delay. The biggest drop – 86,817 – came from those receiving expanded benefits.
Extended federal benefit programs will expire in September, and many states have already closed their own programs as employment continues to improve. However, there are still more than 11 million Americans participating in pandemic-related programs.
At the state level, Pennsylvania, which has been volatile in both directions for the past few weeks, saw a decline of 18,031 on unadjusted data. Kentucky also fell 8,034 while California was down 6,881.
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