The number of Americans making new claims for unemployment benefits unexpectedly ticked up last week, highlighting that the US labour market recovery from Covid may not be as smooth as initially thought.
Demand for workers is extremely high in the US as businesses rush to scale their workforce to cope with a surge in consumer spending after Covid restrictions have gradually lifted.
However, initial claims for state unemployment benefits jumped 2,000 to 373,000 for the week ended July 3, the Labour Department said.
Economists polled by Reuters had forecast 350,000 applications for the latest week.
The new data comes after the US posted a strong monthly jobs report last week which showed American firms hired the greatest number of workers in 10 months in June.
Companies, particularly in the leisure and hospitality industries, have stepped up hiring activity, with vacancies and wages rising.
However, many businesses are struggling to lure workers, which is hitting their production capacity amid soaring demand.
Policymakers have blamed generous unemployment benefits for disincentivising workers to find jobs, while others have pointed to a lack of childcare availability.
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.