New weekly jobless claims fell back below the 400,000 level for the first time in three weeks, resuming improvements after a brief bump higher in initial filings.
The Department of Labor released its weekly report on new jobless claims Thursday at 8:30 a.m. ET. Here were the main metrics from the report, compared to consensus data compiled by Bloomberg:
Initial jobless claims, week ended June 26: 364,000 vs. 388,000 expected and an upwardly revised 415,000 during prior week
Continuing claims, week ended June 19: 3.469 million vs. 3.340 million expected and an upwardly revised 3.413 million during prior week
At 364,000, new filings reached the lowest level since March 2020. Prior to Thursday's report, initial unemployment claims had stagnated in recent weeks, holding stubbornly above the 400,000 level even as employers across the economy struggle to fill open positions. However, the overall trend has improved markedly over a longer time horizon, with new claims coming in at about half their total from the beginning of 2021. New claims were coming in at just over 200,000 per week on average throughout 2019.
"After two upside surprises, claims have dropped to a new cycle low, but only just; the previous low was 374K, three weeks ago," Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in a note. "It’s possible, then, that the recent data signal a slowing in the trend rate of decline in claims, but these numbers are noisy and we aren’t going to rush to judgment on the back of such a short run of data."
"Moreover, the added complication over the next few weeks is that claims are often distorted in late June and early July by the annual automaker retooling shutdowns, which vary in their exact timing and extent from year-to-year," he added.
Many economists are looking for further improvement in the coming months. This would coincide with school reopenings to help alleviate the burden of finding childcare, an increase in consumer mobility and demand over the summer, and a phase-out of federal enhanced unemployment benefits.
As of June 26, about 20 states had partially or fully cut off the augmented jobless benefits put in place at the start of the pandemic. Some state officials have argued that the phase-out, which comes months before the official national expiration date in early September, would help incentive workers to rejoin the workforce especially as employers across industries cite labor shortages.
Some economists, however, have cast doubt on any causal link between ongoing federal unemployment benefits and widespread continued joblessness.
"We find that enhanced jobless benefits are an incentive for only a small share of unemployed workers to not find a job," Oren Klachkin, lead U.S. economist for Oxford Economics, wrote in a note Wednesday. "The data indicates a tenuous relationship between changes in the number of people receiving supplemental jobless benefits and the number of people sending out resumes or filling out job applications."
"In all, the findings indicate that the value of a permanent job and the elimination of risks tied to staying unemployed (such as the chance of a long jobless spell) outweigh the value of enhanced jobless benefits," Klachkin added.
Still, the total number of claimants reported across all programs has been persistently elevated, and mostly comprised those on the federal Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) programs. The sum total of Americans claiming benefits of some form was 14.7 million as of the week ended June 12, which represented a slight tick down from the prior week. Of these, 11.1 million individuals were claimants of either PUA or PEUC.
The decline in new jobless claims was broad-based, with most U.S. states contributing to the decrease. Pennsylvania saw by far the biggest drop in new claims at 18,000 on an unadjusted basis. Kentucky also saw a drop of 8,000 new claims, while filings in California fell by nearly 7,000.
Other states still grappled with elevated insured unemployment rates, or proportion of those claiming unemployment benefits to the total state population. Rhode Island's insured unemployment rate was at 5.1% for the week ended June 12, or more than double the U.S. average of 2.5%.
Nevada, a tourist-heavy state that has for months had one of the highest insured unemployment rates in the nation, saw the second-highest rate at 4.4% for the week. Puerto Rico's insured unemployment rate ticked up to 3.9%, and Connecticut rounded out the top four highest rates at 3.8%.
Upgrade now to stay ahead of the market with Yahoo Finance Plus.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
Read more from Emily: