Weekly unemployment claims rose unexpectedly last week, despite hopes that the U.S. labor market is ready for a strong recovery in the fall.
Initial unemployment insurance applications totaled 419,000 for the week ended July 17, well above the estimated 350,000 Dow Jones and more than the revised upward 368,000 from the previous period, the Department of Labor said Thursday.
The news sent stock market futures to their highs for the morning, and Wall Street pointed to a flat start.
The total is the highest weekly figure since May 15 and comes amid expectations that the job picture will improve significantly as increased unemployment benefits end and companies become more aggressive in filling vacancies.
On the plus side, ongoing claims, which expire a week after the title, fall by 126,000 to 3.24 million, a new pandemic bottom. The total was last higher on March 14, 2020, immediately after the declaration of the Covid-19 pandemic and when US governments ordered businesses to close, sending more than 22 million to the unemployment line.
The surprising rise in claims last week comes as fears of a relatively new delta variant of the coronavirus grow. The number of cases and hospitalizations is rising, mostly among unvaccinated sections of the population, creating the specter that another wave of the disease is hitting the United States and the world.
The new cases and hospitalizations are around the levels they were in mid-May, although they are not far behind where they were during the winter outbreak.
Junior Trader Desislava Dimitrova