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Weekly Jobless Claims Unexpectedly Rise to 373k

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In a potential signal that the economy is running into speedbumps, the latest weekly unemployment figures from the Labor Department show an unexpected jump.

According to CNBC:

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. 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.  “Continuing claims continue to fall as about half the states have gotten rid of expanded benefits and there is clearly a large amount of job openings for the taking with companies utilizing more enticements such as hiring bonuses to bring people back,” Peter Boockvar, chief investment officer at Bleakley Advisory Group. added.

Much of the slack in the labor market has been in the leisure and hospitality sector, which is currently experiencing unprecedented quitting. In the month of May 5.3% of all workers in that industry quit their jobs, which is more than double the 2.5% quit rate for all jobs, and a record level for the industry. Pay in the industry has surged over 15% in the past year as firms try to attract workers.

Part of the difficulty stems from the fact that businesses are competing with the government in states still giving federal enhanced weekly $300 unemployment checks, which is paid on top of all other benefits. According to a report published in the weeks following 26 Republican led states ending federal enhanced unemployment benefits early,  “The 26 states that have announced their plan to end participation in the $300 weekly unemployment bonus have seen a 12.7 percent decline on average in initial claims over the past week. Meanwhile, states that have indicated they will continue participating in the unemployment bonus programs have seen an increase in initial claims by an average of 1.6 percent during this same period. The 12 states that have officially opted out of the $300 weekly bonus thus far have seen consistent declines each week since ending participation in the bonus.”

Matt Palumbo is the author of Dumb and Dumber: How Cuomo and de Blasio Ruined New YorkDebunk This: Shattering Liberal Lies, and Spygate

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