New jobless claims last week greatly exceeded economists’ expectations, despite reports of a recovering economy.
The Department of Labor’s report for weekly unemployment claims reveals that “in the week ending June 12, the advance figure for seasonally adjusted initial claims was 412,000, an increase of 37,000 from the previous week’s revised level.”
In contrast, economists polled by Dow Jones expected 360,000 new claims; the unemployment data, therefore, exceeded forecasts by nearly 15%.
The vast majority of the increase came from California and Pennsylvania, which saw 15,712 and 21,590 new claims, respectively.
Federal Reserve Chair Jerome Powell discussed the sluggish job market recovery in a press conference on Wednesday.
“Factors related to the pandemic, such as caregiving needs, ongoing fears of the virus, and unemployment insurance payments appear to be weighing on employment growth,” Powell said, according to CNBC. “These factors should wane in coming months against a backdrop of rising vaccinations leading to more rapid gains in employment.”
Despite America’s return to economic expansion, joblessness has remained high. For instance, the April jobs report saw an increase in unemployment from 5.8% to 6.1%.
Along with Powell, many Republican policymakers have pointed to generous federal unemployment benefits as a factor discouraging Americans from filling positions. In a hearing, Sen. Lindsay Graham (R-SC) asked Office of Management and Budget Acting Director Shalanda Young: “There’s a lot of jobs out there that are unfilled and will never be filled until you change the benefit structure. Does that logic make sense to you, given where we’re at in our economy?”
“I understand the logic, but I’ve also not met Americans who would prefer not to work,” Young replied. “There’s a dignity to work in this country.”
Republican-led states are opting out of enhanced unemployment benefits to help companies fill open positions. As Gov. Tate Reeves (R-MS) explained, “after many conversations over the last several weeks with Mississippi small business owners and their employees, it has become clear that the Pandemic Unemployment Assistance (PUA) and other like programs passed by the Congress may have been necessary in May of last year but are no longer so in May of this year.”
A previous version of this article erroneously stated that Pennsylvania has 21,50 new jobless claims. It has 21,590 new jobless claims.