U.S. weekly jobless claims remain above 400,000, halts downward trend

The new unemployment jobless claims remained high as businesses battled to fill a record number of job vacancies.

The Labor Department announced on Thursday that initial jobless claims, which are a barometer for layoffs, fell to 411,000 last week from an upwardly revised 418,000 the week before.

The four-week moving average, which smoothes out week-to-week volatility, hit a new epidemic low of 395,000. This is the lowest average level since March 2020, when the pandemic began in the United States.

The number of claims has decreased from a high of 6.14 million in early April 2020. While claims appear to be higher than the pre-pandemic average of around 220,000, economists expect it to fall as the recovery accelerates.

Policymakers' attention has shifted to employment, and the latest data suggests that the dramatic decrease in claims seen earlier in the spring has leveled out.

But there are a record 9.3 million job vacancies, slightly shy of the 9.6 million jobless Americans.

Unemployment benefits, including a $300 weekly check from the government, have also been blamed, as well as reluctance to return to work due to fear of catching the virus.

On June 12, four states, including Iowa and Alaska, canceled all federally funded benefits or simply the $300 supplement. Eight more states, including Alabama and West Virginia, joined them on Saturday. While the Republican governors in 21 other states including Florida and Texas will phase off unemployment benefits between June 19 and July 10.

The Commerce Department also issued data on Thursday that indicated a growing economic recovery. Last month, orders for long-lasting manufactured items increased by 2.3 %.

The agency also issued revised GDP estimates, which are a broad gauge of the economy's output of goods and services. According to the update, GDP increased at a 6.4 % annual rate in the first quarter, which was in line with prior forecasts.