According to data released Thursday by the Labor Department, new applications for unemployment insurance rose last week after reaching a new pandemic low.
According to CNBC, initial filings for unemployment insurance rose to 419,000 for the week ending July 17, well above the 350,000 Dow Jones estimate and above the previously revised total of 368,000 from the previous week.
Economists are characterizing last week’s jobless claims as a blip, according to the Associated Press, likely due to some one-time factors and partly a result of the inevitable bumpiness in the week-to-week data.
The AP cites General Motors as an example of a one-time factor after the company announced it is shutting down truck production in Michigan due to supply shortages.
“I do not worry that this reading signals a sudden weakening in labor demand,” said Stephen Stanley, an economist at Amherst Pierpont Securities. “In fact, I am quite confident that it does not.”
The rise in jobless claims also comes after nearly half of all states pulled out of expanded unemployment insurance programs set to expire in September, and after three consecutive months of accelerating job gains, reports The Hill.
It is good to know that jobless claims are still down considerably from the same week one year ago when more than 32 million Americans were on some form of unemployment aid.
The news sent stock market futures off their highs for the morning, with Wall Street pointing to a slightly negative open. Government bond yields also edged lower.
And, of course, there are continuing worries over the Delta variant of the coronavirus. Case counts and hospitalizations are rising, primarily among unvaccinated parts of the population.
And with case counts rising around the globe, it does raise the specter of another wave of the disease hitting the U.S. and the world.
Despite all this, there are signs that an economic rally is taking place in the U.S. as a large number of previously shuttered businesses have reopened. Additionally, average hourly pay rose a solid 3.6 percent, compared with a year earlier.
