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1.5 million applied for unemployment aid last week as layoffs moderate

Another 1.5 million Americans applied for jobless aid last week, a slight drop from claims the previous week, the Labor Department said Thursday. An additional 760,000 people filed for federal assistance for self-employed workers. 

The number of workers receiving unemployment benefits through all government programs remained at 29 million as of the end of May.

The figures show that widespread joblessness continues, even as some parts of the economy appear to be recovering. 

"As we distance ourselves further from the historically high initial claims seen this spring, the tens of millions that remain unemployed are an increasingly important signal of labor market weakness," Daniel Zhao, senior economist at Glassdoor, said in a note.

"The flattening of continuing claims indicates that there isn't enough hiring to overcome these continuing layoffs."

Employers added 2.5 million jobs last month, and the unemployment rate declined from 14.7% to 13.3%. In addition, shoppers increased their retail purchases in May, retracing some of the record-setting plunges of the previous two months.

"In today's gradually reopening coronavirus economy, hires (or rehires) are now outpacing job losses, but we are still seeing a huge number of people losing jobs," Heidi Shierholz, senior economist at the Economic Policy Institute, said in a blog post.

Many economists caution that the economy could struggle to sustain its recent gains, especially amid signs of a surge in coronavirus infections in many parts of the country.

"It has been a couple of months since the U.S. reopened and the bounceback in activity is certainly a welcome sight. Expect this to continue, though it might come at an erratic pace as second wave/extension of first wave fears come into play," said Jennifer Lee, senior economist with BMO Capital Markets, said in a research note.

With reporting by the Associated Press.

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