U.S. initial jobless claims drop to 360,000 after ticking up in prior week

Initial jobless claims in the United States dropped to 360,000 last week, after ticking up from a pandemic low in the prior week, the U.S. Labor Department reported Thursday.

In the week ending July 10, the number of Americans filing for unemployment benefits decreased by 26,000 from the previous week's upwardly revised level of 386,000, according to a report released by the department's Bureau of Labor Statistics.

This is the lowest level for initial claims since March 14, 2020, when it was 256,000, according to the report.

The four-week moving average, a method to iron out data volatility, fell by 14,500 to 382,500.

The latest report also showed that the number of people continuing to collect regular state unemployment benefits in the week ending July 3 decreased by 126,000 to 3.24 million. That number peaked in April and May last year, when it was over 20 million.

Meanwhile, the total number of people claiming benefits in all programs -- state and federal combined -- for the week ending June 26 also decreased by 372,279 to 13.8 million, as the country continues to grapple with the fallout of the pandemic.

Over 20 states, nearly all of which are Republican-led, previously announced plans to end the 300-U.S.-dollar weekly federal unemployment benefits in June or July, weeks ahead of their expiration date of Sept. 6, citing labor shortage.

In its semi-annual monetary policy report submitted to Congress last week, the Federal Reserve (Fed) said that the COVID-19 pandemic continues to weigh on the U.S. economy and the labor market, reiterating the central bank will maintain its ultra-loose monetary policy to support the economy.

At a hearing before the House Financial Services Committee on Wednesday, Fed Chair Jerome Powell said the U.S. economy is "still a ways off" from the progress that the Fed wants to see before tapering asset purchases.

At a virtual news conference in mid-June, Powell cited four factors that seem likely to be "holding back labor supply": finding a new job, which is a process that takes longer as workers match their skills to what employers want; fear of returning to work, which should "diminish" as vaccinations move ahead; lingering childcare needs; and federal supplements to unemployment insurance.

Last spring, as COVID-19 shutdowns rippled through the workforce, initial jobless claims spiked by 3 million to reach a record 3.3 million in the week ending March 21, 2020, and then doubled to reach a record 6.87 million in the week ending March 28.

After that, the number, though at record highs, has been declining overall, but the trend was reversed multiple times amid COVID-19 resurgences and a bumpy economic recovery.