Initial Jobless Claims Again on the Rise

Applications for U.S. state unemployment benefits unexpectedly rose for a third straight week, led by another surge in California and reflecting choppiness in weekly data.

Initial unemployment claims in regular state programs rose to 362,000 in the week ended September 25, a seven-week high, according to Labor Department data. The median estimate in a Bloomberg survey of economists called for a decrease, to 330,000 new applications.

Meanwhile, continuing claims for state benefits fell to 2.8 million in the week ended September 18.

The increase in initial claims likely underscores swings in weekly data, as employers are desperate to hire more workers and hang onto the ones they still have. Claims are also still hovering near pandemic lows. That said, the last time there were three consecutive weeks of rising unemployment claims was April 2020, though those increases were significantly larger.

The California Surge

California saw an increase of nearly 18,000 claims, after a surge of more than 17,000 in the previous week. Michigan and Texas also showed notable gains, though much smaller. Virginia, after seeing one of the biggest jumps last week, posted the largest decline this week, followed by Maryland.

With the end of federal pandemic unemployment programs, California said those who are still out of work or working reduced hours may qualify for regular state jobless benefits. This could help explain the back-to-back jumps of claims in the state.

Federal pandemic unemployment benefits ended by September 6 in all states. The White House has said it will not extend jobless aid further, but states can use pandemic relief funds to provide additional assistance to unemployed workers.

—With assistance from Reade Pickert & Vince Golle.

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