US employment gains only seeing marginal gains, with jobless tally at 20.5m

Washington: US applications for unemployment benefits fell less than forecast last week, showing only gradual improvement from the worst of the pandemic-related layoffs even as states re-open more of their economies.

Initial jobless claims for regular state programmes totaled 1.51 million in the week ended June 13, down slightly from an upwardly revised 1.57 million in the prior week, Labor Department figures show. Applications have exceeded a once-unthinkable 1 million on a weekly basis since mid-March. 

Continuing claims – the total number of Americans claiming ongoing unemployment benefits in state programmes – decreased to 20.5 million in the week ended June 6. Those figures are reported with a one-week lag.

Given the unprecedented surge of claims in recent months, many economists look to the non-seasonally adjusted figures for a more accurate read on claims. Unadjusted continuing claims actually climbed by almost 26,000 to 18.7 million.

By several metrics, the economy has rebounded at a faster pace than many anticipated. Payrolls at companies increased by several million in May and consumer spending on cars, restaurant meals and more soared last month, exceeding expectations as states loosened restrictions.

Not yet feeling the spark

But the jobless claims data remain a glaring blemish that shows churn and volatility in a labor market that entered the year in solid shape.

Federal Reserve Chair Jerome Powell underscored this dichotomy to lawmakers Tuesday when he said, “We would expect to see large numbers of people during this period coming back to work during this second period – call it the bounce back or the beginning of the recovery,” Powell said.

“Then we think, and I think most if not all forecasters think, that will leave us well short of where we were in February.”