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Initial Jobless Claims Top 1M For 14th Week, Economist Sees 'Most Significant Fiscal Cliff' In US History Ahead

Americans made 1.480 million initial jobless claims in the week ending June 20, a decrease of 60,000 from the prior week, the Department of Labor said Thursday. The figure exceeded the 1.3 million initial claims expected by economists.  What Happened: Initial

Benzinga · -

Americans made 1.480 million initial jobless claims in the week ending June 20, a decrease of 60,000 from the prior week, the Department of Labor said Thursday.

The figure exceeded the 1.3 million initial claims expected by economists. 

What Happened: Initial unemployment claims topped 1 million for the 14th straight week.

The total number of people claiming benefits for the week ending June 6 was 30,553,817.

Some states are seeing increases in claims from the previous week including Oklahoma, Texas and New York.

Oklahoma and Texas are experiencing a surge in coronavirus cases; states with increased case numbers need to be watched going forward to see how spikes affect unemployment claims. 

States including Florida, Michigan and California saw large decreases in unemployment claims from previous weeks.

National unemployment is hovering around 13%, with states such as Nevada experiencing numbers over 20%. 

Why It's Important: The decreases seen Thursday are minimal and are offset by increases in certain states.

The four-week moving average of initial claims is still over 1.6 million.

The federal government's expanded benefit program is still being used extensively, with 46 states reporting a combined 728,100 new Pandemic Unemployment Assistance Claims.

The government-backed Payroll Protection Plan is still keeping some individuals from losing their jobs, but these benefits still have not been guaranteed to be extended upon their expiration at the end of July. 

"If one was looking for confirmation on whether further aid for the unemployed and the economy is necessary, it’s there in plain sight," Joe Brusuelas, chief economist at RSM US LLP, said in a Thursday note.

"Aid for those hurt by the pandemic expires on July 31, which because of those waiting on confirmation is setting up as the most significant fiscal cliff in American economic history."

What's Next: It depends on state reopening policies. Some states such as New Jersey are considering more layoffs for state workers, and other institutions such as colleges are increasing furloughs and layoffs as cuts begin to impact budgets that rely on state funding.