Jobless Claims Unexpectedly Shot Up Last Week, Highest Numbers in California and Virginia
U.S. state unemployment benefit claims unexpectedly shot up last week, increasing 16,000 from the previous week’s level to a total of 351,000. This follows a slight rise in the previous week’s level by 3,000.
The unexpected increase was largely led by a surge in claims in California, with over 20,000 new claims followed by Virginia with almost 13,000.
The new report comes as Gov. Gavin Newsom issued the second round of state stimulus checks to qualifying California citizens. So far, California is the only state with its own stimulus check program, the second of which went out last week. Although jobless claims were still on the rise in the Golden State, California did experience fewer layoffs in the service industry during the same period according to the Department of Labor.
The rise in unemployment claims comes slightly higher than analyst predictions. The median estimate in a Bloomberg survey of economists called for a decrease to 320,000 new applications, with the actual difference about 30,000 more jobless claims than expected.
Overall, jobless claims have been largely on the decline over the last several months. The four-week moving average for initial claims, which accounts for and better represents weekly volatility, declined slightly and remained at its lowest level since the COVID-19 crisis began last year, the Wall Street Journal reports.
Despite numbers moving in the right direction, Department of Labor data shows jobless claims are still around 100,000 higher than they were pre-pandemic. The job market has been somewhat of a conundrum, with high demand for workers but reluctant individuals to fill open spots. Unemployment remains relatively high, despite an abundance of available positions and higher than average salaries for traditionally low-income positions like service industry professionals and hospitality workers.
The increase in jobless claims also comes amid the official cutoff of federal stimulus money for unemployment, a pandemic-era unemployment bi-weekly check that supplemented state unemployment benefits as well. The data could continue to be volatile for the weeks ahead as the market rebalances itself amid decreased federal support.
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