US weekly jobless claims defy economists and climb back above 1 million as the labour-market recovery slows

Image
  • New US jobless claims for the week that ended Saturday totaled 1.1 million, the Labour Department said Thursday. That came in well above the consensus economist estimate of 920,000.
  • The surprise increase followed two consecutive weeks of declines.
  • This week’s report brought total filings over a 22-week period to more than 57 million.
  • Continuing claims, the aggregate total of people receiving unemployment benefits, totaled 14.8 million for the week that ended August 8, a decline from the prior period.
  • Visit Business Insider’s homepage for more stories.

More than 1 million Americans filed new claims for unemployment insurance last week as coronavirus fallout continued to hit the labour market.

New US weekly jobless claims totaled 1.1 million in the week that ended Saturday, the Labour Department reported Thursday. That came in well above the consensus economist estimate of 920,000 million compiled by Bloomberg.

The surprise increase followed two consecutive weeks of declines, signalling a reversal in the labour-market rebound. The prior period had shown the fewest new jobless claims since the pandemic struck, though even that number remained historically high at 963,000.

In just a few months, the more than 57 million unemployment claims filed during the coronavirus pandemic have far surpassed the 37 million during the 18-month Great Recession. The latest figure is still nearly double the 665,000 filed during the Great Recession’s worst week.


Read more:
Stock market wizard William O’Neil famously turned $US5,000 into $US200,000 in just a few year’s time. Here’s the 7-part model he uses to sniff out winning stocks.

“While the uptick certainly isn’t good, it’s too soon to tell how bad it really is,” said AnnElizabeth Konkel, an economist at Indeed Hiring Lab. “What’s more concerning is the raw size of the claims, still 6.9 times higher than during the pre-COVID era.”

Continuing claims, which represent the aggregate total of people receiving unemployment benefits, came in at 14.8 million for the week that ended August 8, a decline from the prior period’s revised number.

Outside stubbornly high unemployment claims, the US economic recovery has shown other signs of slowing. The unemployment rate is still above 10%, consumer sentiment remains tepid, and July retail sales numbers came in weaker than expected.

The future remains uncertain, especially in terms of further government aid. At the end of July, the additional $US600 weekly unemployment insurance benefit expired, and Democrats and Republicans are still at a stalemate in talks for a new stimulus package.


Read more:
JPMorgan pinpoints the triggers for a sell-off in bonds that causes unusually large losses across markets from stocks to gold – and lays out how to be ready for it

In the wake of the stalled talks, President Donald Trump in early August signed four executive orders on further aid for the US economy, including unemployment benefits. This week, eight states were approved to start offering the extra $US300 in federal unemployment benefits to out-of-work Americans, CNBC reported.

The states can choose to include an additional $US100 a week to unemployed residents from their own funds, bringing the total to $US400.

The biggest weekly increases in claims came from New Jersey, New York, and Texas. Applications for the Pandemic Unemployment Assistance program, which extends aid to those not previously eligible, were 542,797 in the week ending August 15.

Claims for the Pandemic Emergency Unemployment Compensation program, which gives up to 13 weeks of federal aid to those who have run out of state benefits, had nearly 1.3 million claims in the week ending August 1. More people have begun to apply for the program as the pandemic recession continues.

The total number of people claiming benefits in all programs was 28 million for the week ending August 1.


Read more:
A $US5 billion chief market strategist shares 5 post-pandemic stocks to buy now for gains as COVID-19 cases level off – and 2 big-tech winners to start cashing out of