Initial Unemployment Claims Fall Slightly Despite Coronavirus Surge

Initial unemployment claims fell to 1.314 million last week even as the coronavirus pandemic surged across the nation's Sunbelt, the Bureau of Labor Statistics reported. It was the 14th straight week claims fell from a high of 10 million in March.

BLS estimated the insured unemployment rate for the week ended June 27 was 12.4%, down a half point from the previous week, with 18 million people looking for work. The four-week moving average was 19 million unemployed, down 636,000 from the previous week's average.

BLS pegged the June unemployment rate last week at 11.1% but the survey was done before coronavirus cases began surging.

Unemployment expert Andrew Stettner, senior fellow at the Century Foundation, said despite the continuing reduction in new claims, 2.4 million were newly laid off last week -- nearly half of whom claimed pandemic benefits, which expire June 31 unless Congress acts, affecting 25 million workers.

“Working families from all over the country, including more than 1 million who signed one petition, have made clear that these extra UI [unemployment insurance] funds have made the difference in helping families pay their medical bills, care for their children and keep a roof over their heads as they await the opportunity to return to work safely," Stettner said in an email to International Business Times. "By more than a two-to-one margin, a clear majority of Americans support an extension of this expanded aid."

Republicans have expressed reluctance in extending the emergency benefits, saying they fear the extra $600 a week encourges people to stay on the jobless rolls.

Bankrate.com senior economic analyst Mark Hamrick said Thursday's numbers are not nearly as optimistic as they appear at first glance.

"With more bankruptcies and job cuts announced in the retail sector, for example, the economy remains at significant risk in the weeks and months ahead," he told IBT. "Let us not forget that new claims have remained extremely elevated and above the 1 million level for 16 consecutive weeks. This is also the sixth straight week that new claims have been stuck between 1 [million] and 2 million, indicating that less momentum is being seen to the downside."

The total number of people claiming benefits for the week ended June 20 was 32.9 million, up 1.4 million from the previous week and including 14,482 federal civilian employees and 13,107 newly discharged veterans. That compares to 1.6 million claiming benefits in the comparable 2019 week.

More than 14.3 million workers claimed Pandemic Unemployment Assistance benefits in 47 states and 850,461 claimed Pandemic Emergency Unemployment Compensation benefits in 41 states.

The highest unemployment rates for the week ending June 20 were in Puerto Rico where the rate hit 25.4%, followed by Nevada at 20.8%, Hawaii at 20.7%, the Virgin Islands at 17.5% and New York at 17.1%.

The largest increases in initial claims were in Michigan, Indiana, Texas, Virginia and Kentucky while the bigggest decreases were registered in Oklahoma, Florida, Maryland, Georgia and California.

Extended benefits were available in all 50 states for the first time.