The number of Americans filing new claims for unemployment benefits increased last week for the first time in more than a month.
But figures today showed that layoffs are easing amid a reopening economy and a shortage of people willing to work.
Initial claims for state unemployment benefits totaled a seasonally adjusted 412,000 for the week ended June 12, compared to 375,000 in the previous week, the Labor Department said today. That was the first increase since late April.
Economists polled by Reuters had forecast 359,000 applications for the latest week.
The US economy is ironically facing a labour crunch, despite employment being still 7.6 million jobs below its peak in February 2020. A shortage of childcare facilities is keeping some parents, mostly women, at home.
Generous government-funded unemployment benefits, including a $300 weekly check, have also been blamed.
There has also been a reluctance to return to work out of fear of contracting Covid-19 even though vaccines are widely accessible.
Pandemic-related retirements and transitions into new careers are also factors.
The Federal Reserve last night held its benchmark short-term interest rate near zero and said it would continue to buy $120 billion in bonds each month to fuel the economic recovery.
The Fed also brought forward its projections for the first post-pandemic interest rate hikes into 2023 from 2024.
Fed Chair Jerome Powell told reporters he was "confident that we are on a path to a very strong labour market, a labour market that shows low unemployment, high participation, rising wages for people across the spectrum."
A handful of states, including Iowa and Alaska, either terminated all federal government-funded benefits or just the $300 supplement last Saturday.
Their fellow Republican governors in 21 other states, including Texas and Florida, will end these benefits for residents between June 19 and July 10. For the rest of the country, the expanded benefits will lapse on September 6.
"It will be particularly important to see if the end of benefits results in an increase in employment or labour force participation in these states over the summer months," said Veronica Clark, an economist at Citigroup in New York.
"It will be important to see if the end of benefits in these states results in rising employment, as this would be a sign of possible labor market trends into the fall when benefits expire nationally."
There are a record 9.3 million job openings in the US, while 9.3 million people are officially unemployed.
Though layoffs are easing, initial claims remain well above the 200,000 to 250,000 range that is viewed as consistent with healthy labour market conditions.