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Economic Report: U.S. jobless claims rise unexpectedly in latest week

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The numbers: U.S. initial jobless claims rose 37,000 to 412,000 in the week ended June 12. This is the highest level in a month.

Economists surveyed by The Wall Street Journal had forecast new claims to fall to a seasonally adjusted 365,000.

The number of people already collecting state jobless benefits, meanwhile, rose by a slight 1,000 to a seasonally adjusted 3.52 million in the week ended June 5. These are known as continuing claims. This is also the lowest level since the onset of the pandemic early last year.

Big picture: Jobless claims filings have been trending lower since February as the economy has been recovering from the pandemic. Claims could fall to 250,000 level by the end of summer, said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

Fed Chairman Jerome Powell said Wednesday that he expects a strong labor market in coming quarters.

What happened: The supplemental unemployment insurance checks and federal pandemic programs were cut off in the first 4 states beginning this week. 

Another 118,025 applications for jobless benefits were filed last week through a temporary federal relief program, up a sharp 46,722 from the prior week. These claims had peaked last year at well over 1 million a week.

Some 5.16 million people who have exhausted state compensation were also getting extra $300 a week in federal benefits as of May 29, down about 75,000 from the prior week. The federal program ends in September and more than two dozen states are going to end the program early starting in the middle of this month.

Altogether, the number of people reportedly receiving benefits from eight separate state and federal programs totaled 14.8 million as of May 29. That’s down about 560,000 from the prior week. Last year, 30 million Americans were receiving these extra benefits.

Market reaction: Stocks
DJIA,
-0.77%

SPX,
-0.54%

were set to open lower after the Fed forecast higher inflation this year.

NewsWatch: Why inflation could create a ‘giant wealth transfer’ from lenders to borrowers

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