New claims for unemployment benefits rose to 1.416 million last week, data from the Department of Labor showed Thursday.
This is the 18th consecutive week of initial claims above 1 million. Prior to March, initial claims had never risen as high as 700,000.
Economists had forecast 1.3 million claims. The prior week was initially reported as 1.3 million claims. The Labor Department revised that figure up by 7,000.
Claims hit a record 6.87 million for the week of March 27. Until this week, each subsequent week has seen claims decline.
Jobless claims can create a distorted picture of the labor market because they measure only job losses and not gains. Continuing claims during the week ending July 11 fell to 16,197,000, a decrease of 1,107,000 from the previous week’s revised level. The previous week’s level was revised down by 34,000 from 17,338,000 to 17,304,000. These figures are reported with a week’s lag.
The federal government has been chipping in an extra $600 a week to state unemployment benefits, making the program much more generous. Many workers can now earn more on unemployment than they did when they had a job. An analysis done by Isabel Soto of the American Action Forum found that the maximum unemployment benefit amount is greater than median wage in all states except the District of Columbia. That may be discouraging some workers from seeking work and leaving the unemployment rolls.
“Using 2019 wage and unemployment data, an upper–bound estimate of 92.8 million workers (or 63 percent of the workforce) typically make below the maximum weekly unemployment benefits under the CARES Act,” Soto wrote.
These super-sized benefits, however, are set to run out at the end of the month. Congress is considering extending the enhanced benefits, although many Republican lawmakers worry that could keep the unemployment rate artificially high.
In addition to claims for regular unemployment benefits, the government now offers two new forms of unemployment benefits to business owners, self-employed, gig-workers, and independent contractors who would not ordinarily qualify for unemployment benefits.
During the week ending Jul 4, 48 states reported 13,179,880 individuals claiming these Pandemic Unemployment Assistance benefits and 45 states reported 940,113 individuals claiming Pandemic Emergency Unemployment Compensation benefits.
The highest insured unemployment rates in the week ending July 4 were in Puerto Rico (26.0), Nevada (21.3), Hawaii (20.7), Georgia (18.0), California (16.9), Louisiana (16.6), New York (16.1), Connecticut (15.4), the Virgin Islands (15.2), and Massachusetts (15.0).
The largest increases in initial claims for the week ending July 11 were in Florida (+65,890), Georgia (+33,292), California (+20,123), Washington (+16,116), and Indiana (+6,258). The largest decreases were in Maryland (-13,728), Texas (-11,583), New Jersey (-8,577), Michigan (-6,882), and Louisiana (-5,066).