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US jobless claims persist even as Americans return to work

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As business reopenings picked up nationwide, Americans filed nearly 2 million applications for unemployment benefits last week, reflecting a slowing - though far from a halt - in job losses.

[NEW YORK] As business reopenings picked up nationwide, Americans filed nearly 2 million applications for unemployment benefits last week, reflecting a slowing - though far from a halt - in job losses.

Initial jobless claims for regular state programmes totaled 1.88 million in the week ended May 30, Labor Department figures showed Thursday, down from 2.13 million the prior week.

It was the first reading below 2 million since the coronavirus-related layoffs began en masse in mid-March. The median estimate in a Bloomberg survey of economists called for 1.83 million claims in the latest week.

Continuing claims - the total number of Americans receiving unemployment benefits - increased to 21.5 million in state programmes the week ended May 23, compared with analyst estimates for a decline. Most states reported declines from the prior week, and the latest increase in part reflects quirks from biweekly filing rules in California, which showed an unadjusted rise of about 618,000.

In the week ended May 30, 36 states reported 623,073 initial claims for Pandemic Unemployment Assistance, the federal programme that extends unemployment benefits to those not typically eligible like the self-employed.

Thursday's report underscores the current dichotomy in the labour market. The layoffs are continuing - and hitting the higher-wage workers and supervisors that escaped the initial wave of layoffs - but at the same time, a multitude of Americans have headed back to work with varying degrees of business restrictions being eased in all 50 states.

The initial claims figure remains enormous at about nine times the pre-pandemic weekly average, but weeks of decreasing initial claims suggests the worst of the coronavirus-related layoffs is over. Even so, lingering effects from forced business closures and the pandemic itself will likely weigh on any recovery in the labor market for some time.

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