The number of Americans filing new claims for unemployment benefits rose unexpectedly last week, an indication that the labour market recovery from the Covid-19 pandemic continues to be choppy.
Businesses have reopened at a rapid clip, boosted by a rollback in restrictions now that more than 155 million Americans have been fully vaccinated against the coronavirus.
But the job market rebound has been anything but steady despite recent employment gains.
Initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 373,000 for the week ended July 3, the Labor Department said.
Economists polled by Reuters had forecast 350,000 applications for the latest week.
The data comes on the heels of an encouraging monthly jobs report from the Labor Department last Friday, which showed US companies hired the most workers in 10 months in June.
Claims have dropped from a record 6.149 million in early April 2020 but remain above the 200,000-250,000 range that is seen as consistent with a healthy labour market.
The claims data may remain volatile in the coming weeks as 25 states with mostly Republican governors pull out of federal government-funded unemployment programs.
These included a $300 weekly check, which businesses complained were encouraging the jobless to stay at home.
The early termination began on June 5 and will run up to July 31, when Louisiana, the only one of those states with a Democratic governor, ends the weekly check.
For the rest of the country, these benefits will lapse on September 6.
The claims report also showed the number of people continuing to receive benefits after an initial week of aid declined 145,000 to 3.339 million during the week ended June 26.
There were 14.2 million people receiving benefits under all programmes in late June, a fall from 14.7 million earlier in the month.
Lack of affordable child care and fears of contracting the coronavirus have been cited for keeping workers, mostly women, at home.
There were a record 9.2 million job openings at the end of May and 9.5 million people were officially unemployed in June.