US jobless numbers have improved over the last fortnight, but the question is will all the good work be undone by soaring cases. Image Credit: AFP

Washington: Applications for unemployment benefits in the US declined last week by more than projected, easing concerns of a renewed downturn in the labor market after several large states reported a pickup in coronavirus cases.

Initial jobless claims in regular state programmes fell by 99,000 to 1.31 million in the week ended July 4, Labor Department data showed Thursday. 

Continuing claims - the total number of Americans claiming ongoing unemployment benefits in state programmes - declined to 18.1 million in the week ended June 27, compared with a median projection of 18.8 million.

The latest numbers indicate that firings have continued to ebb, though labor-market gains may still be at risk of stalling in coming weeks. Prior to a surge in new virus cases that prompted several states - including Texas and Florida - to delay or walk back reopening plans, employers were adding millions of Americans back to payrolls.

Of states that have seen a recent surge in outbreaks, California and Florida saw decreases in unadjusted initial claims from the prior week. Arizona was largely unchanged. Texas initial claims saw about 20,650 more initial applications compared to the prior week.

The reversal in policy has led a cohort of rehired workers to find themselves out of work once again. Initial claims for regular state programmes remain about double the worst week in the 2007-2009 recession, indicating a distressing number of workers continue to get caught up in the economic fallout of the pandemic.