There is some optimism after the number of Americans applying for unemployment benefits dropped last week. This is seen as a sign that layoffs declined and the job market is improving. Meanwhile, Oxford Economics’ economists stated that the labor market is expected to grow further.
According to Associated Press, the Labour Department said Thursday that jobless claims declined just 7,000 from the previous week to 411,000. The number of weekly applications for unemployment aid has fallen steadily this year from about 900,000 in January. The unemployment claims reflect the layoffs pace.
Despite the uptick in new claims, continuing claims for regular benefits declined 1,44,000 to 3.39 millon in the week ended June 12
“We expect the labor market recovery to gather momentum in the months ahead and anticipate a total of 8 million jobs will be created in 2021,” stated Oxford Economics.
According to the Federal Reserve Bank of Atlanta, the growth could top 10 per cent at an annual rate in the April-June quarter.
With rise in inoculation and drop in COVID cases, more and more restrictions in business are expected to be lifted. This is expected to improve the economy in times to come.
Starting this month, 26 states will end an extra USD 300 weekly federal unemployment payment and 22 of those states will also cut off all jobless assistance to self-employed, gig workers, and those out of work for more than six months. The extra USD 300 ends nationwide September 6.
Meanwhile, Bank of America economists have estimated that those who earned less than USD 32,000 a year at their previous jobs can receive more in jobless aid with the extra USD 300.
Kathy Bostjancic, Chief US Financial Economist, Oxford Economics stated, “Another seven states terminated emergency unemployment benefits early during the week of the 19th, bringing the overall number to 12, with another 10 slated to end them by June 27.” This shows sign of improvement.