Initial unemployment claims unexpectedly increased last week for the first time since April despite an ongoing recovery in the U.S. jobs market, reports said.
Jobless claims were up to 412,000 in the week ended June 12, which was 37,000 more compared to the previous week, the U.S. Department of Labor said.
In Thursday's report, the Labor department said 3.5 million Americans were continuing to collect jobless claims in the week ending June 5, up by around 1,000 from the week before.
All of the increase came from two states: Pennsylvania recorded a gain of 21,590, while California was up 15,712, unadjusted data show.
Claims filed under the Pandemic Unemployment Assistance (PUA) program for freelance workers climbed 46,722 to 118,025, not seasonally adjusted, the data showed, according to Agence France-Presse.
Even with the increase, layoffs have been down in recent months as health concerns eased and businesses ramp up hiring. The number of jobless claims normally reflects the rate of layoffs.
While regular initial claims (nsa) did tick up this week, don't freak out yet. It's one week of data. Regular initial claims are broadly trending downward when looking at the longer time series. pic.twitter.com/lqfW6j4C3X — AnnElizabeth Konkel (@AE_Konkel) June 17, 2021
"Don't freak out yet," Ann Elizabeth Konkel, economist at Indeed Hiring Lab, said on Twitter. "It's one week of data. Regular initial claims are broadly trending downward when looking at the longer time series," she said in remarks quoted by Agence France-Presse.
A year ago, almost 1.5 million people had applied for jobless insurance in one week in the wake of continued government-implemented business shutdowns aimed at containing the pandemic.
Economists estimate continued improvement in the U.S. labor market through the end of 2021, with an expectation that the jobless rate will drop below 5% by the end of the fourth quarter, Bloomberg said.
Economists also said with increased Covid-19 immunizations and more consumers venturing out to spend - on store purchases, meals, movie and airline tickets - the economy is quickly rebounding from the pandemic.
"Factors related to the pandemic, like care-giving needs, ongoing fears of the virus, and jobless insurance payments appear to be weighing on employment growth," Federal Reserve Chair Jerome Powell said, according to Bloomberg.
