Weekly jobless claims in the United States rose much more than expected last week

Unexpected weekly jobless claims rose last week despite hopes that the US labor market will be ready for a strong recovery as fall approaches.

Initial unemployment insurance claims totaled 419,000 for the week ended July 17, well above the Dow Jones’ 350,000 estimate and more than the revised upward 368,000 from the previous period, reported Thursday the Labor Department.

The news caused stock market futures to drop from their morning highs, with Wall Street pointing to a slightly negative open. Government bond yields also ended lower.

The total was the highest weekly tally since May 15 and comes as the employment situation is expected to improve markedly as the increase in unemployment benefits ends and companies are becoming more aggressive in filling vacancies.

On the bright side, continuing claims, which are a week behind the overall count, have fallen from 126,000 to 3.24 million, a new pandemic low. The total was last highest on March 14, 2020, just after the declaration of the Covid-19 pandemic and as US governments ordered businesses to close, sending more than 22 million people out of work .

The total of those receiving benefits under all government programs also declined, falling from 372,279 million to 13.84 million. At the same time a year ago, 30.6 million people were receiving benefits.

The surprise surge in claims last week comes as fears grow about the relatively new delta variant of the coronavirus. The number of cases and hospitalizations are increasing, mainly among unvaccinated parts of the population, raising fears that another wave of the disease is hitting the United States and the world.

New cases and hospitalizations are close to levels they were in mid-May, although they remain a fraction of what they were during the winter outbreak.

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