# U.S. weekly jobless claims fall to 16-month low Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-07-15 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: US Unemployment Claims Drop to 16-Month Low Amid Worker Meta Description: New jobless claims hit lowest level since March 2020, indicating improving labour market. Businesses struggle with worker shortages amid strong demand. URL: https://financedigest.com/u-s-weekly-jobless-claims-fall-to-16-month-lowhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2021-07-15t135726z1lynxmpeh6e0sdrtroptp4usa-fed-outlook-1736838173089-compressed.jpg) By Lucia Mutikani WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits fell to a 16-month low last week as the labor market steadily gains traction, but worker shortages are frustrating efforts by businesses to ramp up hiring to meet strong demand for goods and services. While other data on Thursday showed import prices rose solidly in June, prices have likely peaked, which could support the view that high inflation is transitory. The [economy’s recovery from the COVID-19 pandemic](https://www.financedigest.com/uk-economy-finally-bigger-than-before-pandemic-in-november.html "UK economy finally bigger than before pandemic in November") has been accompanied by faster inflation, reflecting strong demand and supply constraints. Federal Reserve Chair Jerome Powell told lawmakers on Wednesday that [“inflation has increased notably and will likely remain elevated in coming months](https://www.financedigest.com/inflation-in-key-german-states-eases-for-second-month.html "Inflation in key German states eases for second month") before moderating. Initial [claims for state unemployment benefits](https://www.financedigest.com/why-you-might-want-to-wait-until-age-70-to-claim-social-security-benefits.html "Why You Might Want to Wait Until Age 70 to Claim Social Security Benefits") fell 26,000 to a seasonally adjusted 360,000 for the week ended July 10, the lowest level since mid-March 2020, the Labor Department said. Data for the prior week was revised to show 13,000 more applications received than previously reported. Economists [polled by Reuters](https://www.financedigest.com/bank-of-england-to-raise-rates-by-50bps-again-to-tame-inflation-reuters-poll.html "Bank of England to raise rates by 50bps again to tame inflation: Reuters Poll") had forecast 360,000 applications for the latest week. On an unadjusted basis, claims rose 544 to 383,166 last week. Claims have struggled to make further progress [since dropping](https://www.financedigest.com/optimism-levels-drop-to-low-of-17-percent-according-to-first-survey-since-banking-regulations.html "Optimism levels drop to low of -17 percent, according to first survey since banking regulations") below 400,000 in late May, even as at least 20 states led by Republican governors have pulled out of federal government-funded unemployment programs. Unemployed people are required to file claims under the regular state programs to determine eligibility for federal benefits. The early termination of the federal programs followed complaints by [businesses that the benefits](https://www.financedigest.com/the-local-benefits-which-can-help-your-business.html "The local benefits which can help your business"), including a $300 weekly check, were encouraging unemployed Americans to stay at home. The economy is experiencing a shortage of workers, with a record 9.2 million [job openings as of the end](https://www.financedigest.com/hp-to-cut-about-12-jobs-by-end-of-fiscal-2025.html "HP to cut about 12% jobs by end of fiscal 2025") of May. About 9.5 [million people](https://www.financedigest.com/the-start-up-using-technology-to-help-the-20-million-people-in-britain-with-money-worries.html "The start-up using technology to help the 20 million people in Britain with money worries") are officially unemployed. The disconnect has also been blamed on lack of affordable child care, fears of [contracting the coronavirus as well as pandemic-related career changes](https://www.financedigest.com/the-antibodies-contract-manufacturing-market-to-see-through-the-probable-sea-change-through-digitization.html "The Antibodies Contract Manufacturing Market to see through the probable sea change through digitization") and retirements. There is so far little evidence that the early termination of federal benefits, which started on June 12 and will run through July 31, has led to a [surge in job](https://www.financedigest.com/u-s-job-growth-surges-in-july-as-labor-market-defies-recession-fears.html "U.S. job growth surges in July as labor market defies recession fears") searches. The expanded benefits will lapse on Sept. 6 for the rest of the country. Powell told the U.S. [House of Representatives Financial Services Committee](https://www.financedigest.com/us-house-committee-chair-concerned-by-tesla-deals-in-china.html "US House committee chair ‘concerned’ by Tesla deals in China") on Wednesday that he expected that “job gains should be strong in coming months as public health conditions continue to improve and as some of the other pandemic-related factors currently weighing them down diminish. The Fed’s latest Beige Book report, a collection of anecdotes from businesses across the country, showed demand for labor was broad-based, but “strongest for low-skilled positions,” [noting that “firms in several Districts expected the difficulty finding workers to extend into the early fall.”](https://www.financedigest.com/dollar-falls-to-nine-month-low-as-powell-notes-progress-in-disinflation.html "Dollar falls to nine-month low as Powell notes progress in disinflation") U.S. [stocks](https://www.financedigest.com/mutual-funds-vs-stocks-which-is-better.html "stocks") opened lower. The [dollar fell against a basket of currencies](https://www.financedigest.com/u-s-dollar-advances-vs-major-currencies-as-risk-appetite-fades.html "U.S. dollar advances vs major currencies as risk appetite fades"). U.S. [Treasury yields](https://www.financedigest.com/stocks-fall-treasury-yields-rise-upon-final-2022-trading-day.html "Stocks fall, Treasury yields rise upon final 2022 trading day") were lower. STILL ELEVATED Companies are clamoring for workers to increase production of goods and services amid a surge in demand unleashed by COVID-19 vaccinations, [low interest rates](https://www.financedigest.com/interest-rates-are-cut-to-an-all-time-low-what-will-this-mean-for-small-businesses.html "Interest rates are cut to an all-time low. What will this mean for small businesses?") and nearly $6 trillion in government relief since the pandemic started in the United States in March 2020. Though at least 160 million Americans are fully immunized against COVID-19, some parts of the country with low vaccination [rates are experiencing a surge](https://www.financedigest.com/boes-bailey-speaks-about-surging-inflation-and-rate-hikes.html "BoE’s Bailey speaks about surging inflation and rate hikes") in infections from the Delta variant of the coronavirus, which could slow the recovery. Claims have declined from a [record 6.149 million](https://www.financedigest.com/ireland-fines-instagram-a-record-400-million-over-childrens-data.html "Ireland fines Instagram a record 0 million over children’s data") in early April 2020. They, however, remain above the 200,000-250,000 range that is seen as consistent with a [healthy labor market](https://www.financedigest.com/the-biomarkers-market-to-imbibe-healthy-growth-by-innovation.html "The Biomarkers Market to imbibe healthy growth by innovation"). Some of the recent elevation in claims has been blamed on the so-called seasonal factor, which the government uses to iron out seasonal fluctuations from the data. The [claims report showed the number of people continuing to receive benefits after an initial week of aid fell 126,000 to 3.241 million](https://www.financedigest.com/philips-subsidiary-to-pay-over-24-million-for-alleged-false-claims-for-medical-equipment.html "Philips subsidiary to pay over million for alleged false claims for medical equipment") in the week ended July 3. There were 13.8 million people collecting [unemployment checks under all programs in the week ending June](https://www.financedigest.com/u-s-job-growth-picks-up-in-june-unemployment-rate-rises-to-5-9.html "U.S. job growth picks up in June; unemployment rate rises to 5.9%") 26. In another report on Thursday, the Labor Department said import [prices rose 1.0% in June after surging](https://www.financedigest.com/unicredit-sets-out-8-billion-aid-package-for-italy-clients-hit-by-surging-prices.html "UniCredit sets out billion aid package for Italy clients hit by surging prices") 1.4% in May. In the 12 months through June, import prices rose 11.2% compared to 11.6% in May. Economists [polled by Reuters](https://www.financedigest.com/worst-not-over-for-em-currencies-as-u-s-dollar-thunders-on-reuters-poll.html "Worst not over for EM currencies as U.S. dollar thunders on: Reuters poll") had forecast import prices, which exclude tariffs, would increase 1.2%. The government reported this week that consumer [prices increased](https://www.financedigest.com/syngenta-4q-profit-falls-as-raw-material-prices-increase.html "Syngenta 4Q profit falls as raw material prices increase") by the most in 13 years in June, while producer prices accelerated. Imported fuel [prices advanced 4.7% last month after rising](https://www.financedigest.com/oil-prices-rise-on-u-s-drawdown-chinese-fears-weigh.html "Oil prices rise on U.S. drawdown, Chinese fears weigh") 5.5% in May. Petroleum [prices gained](https://www.financedigest.com/oil-prices-stable-heading-for-weekly-gain.html "Oil prices stable, heading for weekly gain") 4.6%, while the cost of imported food increased 1.9%. Excluding fuel and food, import prices climbed 0.6%. These so-called core import prices shot up 1.1% in May. The report also showed export [prices increased 1.2% in June after rising](https://www.financedigest.com/oil-prices-rise-as-china-eases-covid-curbs-u-s-storm-fuels-supply-worries.html "Oil prices rise as China eases COVID curbs, U.S. storm fuels supply worries") 2.2% in May. [Prices for agricultural exports](https://www.financedigest.com/33391german-exporters-pinched-by-70-billion-euro-price-squeeze-dihk.html "German exporters pinched by 70-billion-euro price squeeze – DIHK") advanced 1.5%. Nonagricultural export [prices gained](https://www.financedigest.com/oil-prices-extend-gains-with-falling-supplies-in-focus.html "Oil prices extend gains with falling supplies in focus") 1.1%. [Export prices increased 16.8% on a year-on-year basis in June after surging](https://www.financedigest.com/swiss-gold-exports-to-china-slow-but-shipments-to-turkey-surge.html "Swiss gold exports to China slow but shipments to Turkey surge") 17.5% in May. (Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Paul Simao) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---