Jobless Claims Decline Further

States reported that 376,000 workers filed for new unemployment benefits during the week ending June 5, a decrease of 9,000 from the previous week’s revised level and the lowest level of initial claims since March 2020. The total number of workers continuing to claim state unemployment benefits dropped precipitously to 3.5 million.

Even though weekly jobless claims are improving, employers are reporting labor supply shortages. Some economists have pointed to enhanced unemployment benefits and expanded eligibility for benefits as factors contributing to these shortages, especially in the services sector. For that reason, at least 25 states are cutting off access to federal benefits this summer, before the program’s September expiration. A few of these states are ending some or all of these programs as soon as the end of this week.

About 15.3 million people overall are receiving some type of unemployment aid. That includes about 11.5 million people enrolled in emergency programs such as the Pandemic Unemployment Assistance program for gig workers and the self-employed and the Pandemic Emergency Unemployment Compensation program, which offers an additional 24 weeks of benefits. Both programs are slated to be eliminated by half the states in June and July.