New applications for US unemployment benefits fell slightly in the latest week, while claims for pandemic aid fell sharply, the Labor Department reported Thursday.
Despite coming in higher than analysts expected, the decline of 24,000 took initial claims to 400,000, seasonally adjusted, in the week ended July 24. However, the four-week average of new claims rose, according to the report.
The data show the continued need for jobless aid as the world's largest economy recovers from the Covid-19 pandemic.
Nearly two dozen states have called an early end to special unemployment programs provided by the federal government, and new applications for Pandemic Unemployment Assistance for freelance workers not usually eligible for regular benefits fell by nearly 15,000 in the week.
But even as businesses have reopened and hiring picks up, the total tally of people receiving some form of aid, including the special pandemic programs, jumped to 13.2 million, not seasonally adjusted, in the week ended July 10.
Rubeela Farooqi of High Frequency Economics said seasonal adjustment issues in July are likely distorting the data.
"Beyond weekly ups and downs, the trend in total filings should remain downward over coming weeks," she said in an analysis.
"Overall, job growth should pick up and labor shortages should ease as near-term constraints -- virus concerns, child-care issues and enhanced unemployment benefits -- diminish," she said. "But rising virus cases could be a headwind for the labor market and the economy."