13.8M Americans Receiving Unemployment Benefits, 850K Jobs Added in June

As of the week of June 26, 13.8 million Americans were receiving unemployment benefits as the month saw an uptick of 850,000 new jobs added nationwide, the Associated Press reported.

The U.S. economy is rebounding following the onset of the pandemic. However, as employers post more job openings, they are struggling to fill positions due to a national worker shortage. Some people are still receiving unemployment such as the temporary weekly $300 benefit alongside regular state aid. About half of the states are planning to end the $300 benefit by the end of July.

"As life normalizes and the service sector continues to gain momentum, we expect initial jobless claims to remain in a downtrend," U.S. economist Joshua Shapiro told the AP. Shapiro is a chief economist at the Maria Fiorini Ramirez consulting firm.

June's job openings follow May's record 9.2 million new jobs added. Despite the job surge, the U.S. has 6.8 million less jobs than there were in February 2020.

For more reporting from the Associated Press, see below:

Now Hiring Sign
Toward the end of June, 13.8 million Americans were receiving unemployment benefits as the month saw 850,00 jobs added. In this photo, pedestrians walk by a "Now Hiring" sign in front of a boxing gym on July 7 in San Rafael, California. Justin Sullivan/Getty Images

The number of Americans applying for unemployment benefits has reached its lowest level since the pandemic struck last year, further evidence that the U.S. economy and job market are quickly rebounding from the pandemic recession.

Thursday's report from the Labor Department showed jobless claims fell by 26,000 last week to 360,000. The weekly tally, a proxy for layoffs, has fallen more or less steadily since topping 900,000 in early January.

The U.S. recovery from the recession is proceeding so quickly that many forecasters have predicted that the economy will expand this year by roughly 7 percent. That would be the most robust calendar-year growth since 1984.

The rollout of COVID-19 vaccines has sharply reduced new viral cases—from a seven-day average of around 250,000 in early January to roughly 25,000 recently—despite a recent uptick. As the health crisis has receded, cooped-up Americans have increasingly emerged from their homes, eager to spend on things they had missed during pandemic lockdowns—dinners out, a round of drinks, sports and entertainment events, vacation getaways and shopping trips.

In response, businesses have scrambled to meet the unexpected surge in customer demand: They are posting job openings faster than they can fill them. The worker shortage in many industries is causing employers to raise wages and in some cases to raise prices to offset their higher labor costs.

The supply of potential hires is being held back by a variety of factors. Many Americans still have health concerns about working around large numbers of people. Many people, mostly women, are no longer working or looking for work because they had to care for children when schools and day care centers shut down. And roughly 2.6 million older workers took advantage of enlarged stock portfolios and home values to retire early.

A temporary $300-a-week federal unemployment benefit, on top of regular state jobless aid, may be enabling some people to be more selective in looking for and taking jobs. Proponents say the end of paying the supplement is an effort to nudge more of the unemployed to seek jobs.

Last month hourly pay rose a solid 3.6 percent compared with a year ago—faster than the pre-pandemic annual pace and evidence that companies are being compelled to pay more to attract and keep workers.

And weekly applications for unemployment benefits remain high by historical standards: Just before the pandemic, they amounted to about 220,000 a week. All told, 13.8 million Americans were receiving some type of unemployment aid during the week of June 26, down from 30.6 million a year earlier.

Cards on Display
Temporary unemployment benefits have been enabling some people to be more selective in looking for and taking jobs. American Express, Visa and Master card cards on display in Richmond, Virginia on July 1. Steve Helber/AP Photo