Applications for U.S. state unemployment rose for the first time in five weeks as the labor market makes its way to a full recovery in fits and starts.
Initial unemployment claims in regular state programs totaled 353,000 in the week ended Aug. 21, up 4,000 from the prior week, though still near pandemic lows, Labor Department data showed Thursday. The median estimate in a Bloomberg survey of economists called for a slight increase to 350,000 new applications.
Continuing claims for state benefits fell slightly to 2.9 million in the week ended Aug. 14.
The increase in unemployment claims likely reflects volatility in the weekly data against a backdrop of elevated labor demand. The delta variant that’s fueled a recent surge in new infections across the country poses a risk, though there’s so far been little evidence to suggest that health concerns are leading to dismissals.
Still, lawmakers are wary of the threat the highly infectious variant poses to a broader economic recovery.
Companies are postponing a return to the office and issuing mask requirements and vaccine mandates to curb the spread. The Biden administration has emphasized the need to reopen the economy, but cautioned that businesses need to protect workers and consumers.
A separate report out Thursday showed U.S. economic growth in the second quarter was revised slightly higher, reflecting stronger business investment and exports than previously estimated.
Initial claims in Michigan, Texas and Virginia saw the biggest declines last week. Maryland posted the largest increase, followed by California and Illinois.
More than 20 governors have prematurely ended federal unemployment programs — including an extra $300 weekly payment — put into place during the pandemic, hoping that removing the enhanced benefits would incentivize workers to look for jobs.
Lawsuits in some of those states challenging the governors’ legal authority to end the aid could restore the halted benefits until they officially expire in early September.
While the White House has indicated it will not extend jobless aid any further, it did inform states last week that unused pandemic-relief funds can be used to continue providing assistance to unemployed workers.