New Unemployment Claims See Another Uptick As Labor Market Struggles To Rebound

In another surprise to labor market analysts, initial filings for unemployment insurance saw an uptick for the week ending July 3.

As CNBC reports: 

First-time jobless claims totaled 373,000 for the week ended July 3, compared with the 350,000 Dow Jones estimate. The previous week’s level was revised up by 7,000 from 364,000 to 371,000.

Other weekly Department of Labor reports show similar results. For instance, 412,000 people filed initial claims for the week ending June 12 — a figure that exceeded analysts’ predictions by nearly 15%.

CNBC continues:

The level of continuing claims, the measure of ongoing benefits, decreased to 3.34 million, down 145,000 from the previous week’s revised level. Despite the uptick in first-time applicants, the decreased number of continuing claims represented the lowest level for insured unemployment since March 2020. The four-week moving average for continuing claims, which smooths weekly volatility, fell by 44,500 to 3.44 million, also the lowest since March 2020.

In the weeks before COVID-19 and the lockdown-induced recession, initial claims were slightly above 200,000 per week. Continuing claims were between 1.5 and 2 million.

Several reports reveal that Democrat-run states are experiencing lackluster labor market recoveries in comparison to Republican-run states. For instance, analysis from personal finance company WalletHub found that nine of the top ten states for employment rebounds are led by Republican governors, while all of the bottom ten states are led by their Democratic counterparts.

Most Republican governors have voluntarily opted their states out of the federal government’s $300-per-week enhanced unemployment insurance. Only one Democratic governor — John Bel Edwards of Louisiana — has announced an intention to nix the additional payments before they automatically expire on September 6.

Another study from the Committee to Unleash Prosperity revealed that between state and federal programs, a family with two parents receiving unemployment can receive “equivalent to $100,000 a year in salary” in many blue states.

An analysis from Hoover Institution fellows John F. Cogan and Daniel Heil predicted that President Biden’s American Families Plan would add 21 million people to federal welfare programs. Under the $1.8 trillion omnibus package, over 80% of single-parent households would enter the entitlement rolls as the federal deficit expands by $1 trillion over the next decade.

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