MACRO: US jobless claims unexpectedly rise for first time since April

Initial jobless claims rose to 412K, the first increase in 7 weeks and compared to analysts’ estimates of 360K. Continuing claims, which run a week behind the headline number, were little changed at 3.52 million a sign the labour market still has a long way to recover from the coronavirus hit, and offering some support the Fed will scale back its stimulus support in a slow, cautious way. 

Initial Jobless Claims unexpectedly rose last week from 375k to 412k. Source: Bloomberg

This week's report reflected the last survey period during which full federal unemployment benefit programs were in place across all US states, with Alaska, Iowa, Missouri and Mississippi becoming the first states to reduce federal support ahead of the official September expiration date. Meanwhile, large and small businesses continue to report persistent labor shortages, which are in part caused by high benefits that discourage some people from entering employment, fears of contracting COVID-19, and difficulties finding childcare. Unadjusted claims rose to 402 thousand last week, with the largest increases being recorded in Pennsylvania, California and Kentucky while number of Americans which remain receive some form of government jobless benefit dropped below 15 million, however, the pace of decline is not overwhelming.

The total number of Americans on the dole dropped below 15 million for the first time since April 2020. Source: Bloomberg via ZeroHedge