WASHINGTON - More jobless U.S. workers sought benefits last week, ending a string of six straight weeks of a falling number of claims, the Labor Department reported Thursday.
The world’s biggest economy is on a path toward recovery from the coronavirus pandemic, but 412,000 newly laid-off workers filed for unemployment compensation last week, up 37,000 from the revised figure of the week before, the agency said. It was the first time in three weeks that the weekly figure topped 400,000.
State governors and municipal officials across the U.S. have been ending coronavirus restrictions, in many cases allowing businesses for the first time in a year to completely reopen to customers. That could lead to more hiring of workers.
California, the country’s most populous state, fully reopened its economy this week.
Nearly 55% of U.S. adults have now been fully vaccinated against the coronavirus, boosting the economic recovery, although the pace of inoculations has dropped markedly from its peak several weeks ago. Officials in many states are now offering a variety of incentives to entice the unvaccinated to get inoculated, including entry into lucrative lotteries.
The U.S. added 559,000 jobs in May, more than twice the 266,000 in April. Still, about 9.3 million people remain unemployed in the U.S., according to the government.
With the business reopenings, many employers are reporting a shortage of workers, particularly for low-wage jobs such as restaurant servers and retail clerks.
Many businesses complain they are unable to find enough applicants for the job openings. The jobless rate fell to 5.8% in May, still higher than the 3.5% rate in March of last year before the pandemic was declared.
The federal government approved sending $300-a-week supplemental unemployment benefits to jobless workers through early September on top of less generous state-by-state payments.
But at least 25 of the 50 states, all led by Republican governors, have started ending participation in the federal payments program, contending that the stipends let workers make more money than they would by returning to work and thus are hurting the recovery by not filling available job openings.
Some economists say, however, other factors prevent people from returning to work, such as lack of childcare or fear of contracting the coronavirus.
The U.S. government has determined that it has no authority to force the states to continue to make the payments into September. President Joe Biden recently reaffirmed rules for accepting the extra federal aid so unemployed workers could not game the system.
“We're going to make it clear that anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits," Biden said. “That's the law."
The economic picture in the U.S. has been boosted as money from Biden’s $1.9 trillion coronavirus relief package filters through the economy. The measure has likely boosted consumer spending, as millions of Americans, all but the highest wage earners, are now receiving $1,400 stimulus checks from the government or have already been sent the extra cash.
With more money in their wallets and more people vaccinated, Americans are venturing back to some sense of normalcy, going out to restaurants and spending money on items they had not purchased for a year.
But consumers are encountering higher retail prices, with the Bureau of Labor Statistics reporting last week that prices jumped 0.6% in May and 5% over the last year.
Biden is proposing an additional $4 trillion in government spending on infrastructure repairs and assistance for children and families, but the assistance has been met with stiff resistance from Republicans. The fate of the proposals in the politically divided Congress remains uncertain but talks are planned between the White House and a bipartisan group of Republicans and Democrats.
Numerous Republican lawmakers have voiced opposition to the size of the Democratic president’s spending plans and his proposals to pay for them with higher taxes on corporations and the wealthiest Americans.
Absent an agreement with Republicans, Democratic congressional leaders say they could attempt to push through Biden’s proposals solely with Democratic votes without any Republican support, as occurred with passage of the coronavirus relief package.