US Unemployment Claims Rise Parallel to COVID-19 Cases
First-time Unemployment Claims for Americans rose further in the past week, suggesting rising new COVID-19 infections and economic restrictions are driving layoffs and undermining labor market recovery..
Other data on Wednesday showed that business spending on capital expenditures remained stable at the beginning of the fourth quarter, although it was down from prior months.. Durable goods orders increased better than expected by 1.3%, which is much higher than the Dow Jones estimate by 0.6%.
«This is one of the strangest recession exits in history.», – wrote Chris Rupki (Chris Rupkey), Chief Financial Economist at MUFG Union Bank. «The companies are clearly not short of cash and are looking to bolster the economy next year as they continue to order new durable capital goods equipment to meet demand for their goods and services. Corporations don’t see uncertainty and don’t even know there was a recession».
Still, the economy is moving at a slower pace as government aid for coronavirus surpasses $ 3 trillion. Another bailout package is expected only after the President-elect Joe Biden will be sworn in on January 20. The president Donald Trump while still focused on contesting his defeat in the presidential election.
«A two-tier recovery is taking place from the pandemic recession, with the upper half of society continuing to spend as usual, while the lower half of the country sits in long lines at food banks with few and rare job opportunities.», – said Chris Rupki.
Initial claims for state unemployment benefits increased by 30,000 to a seasonally adjusted 778,000 in the week ending November 21, the Labor Department said Wednesday. This was the second consecutive weekly increase in applications. Economists polled by Reuters predicted 730,000 applications in the last week.
The number of applications from those who received benefits for at least two weeks fell to 6.07 million, or 299,000 people.
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The weekly claims report, the most up-to-date data on the state of the economy, was released a day earlier due to the Thanksgiving holiday (Thanksgiving Day) which comes tomorrow Thursday.
Last week, unadjusted claims jumped from 78,372 to 827,710. Economists prefer the unadjusted number due to pre-existing difficulties in adjusting insurance claims data for seasonality due to the economic shock caused by the pandemic.
Including a government-funded program for the self-employed, show business workers and others who are not eligible for regular government unemployment programs, 1.14 million people applied last week. In early November, at least 20.5 million people received unemployment benefits.
The number of people participating in the pandemic unemployment assistance program, which provides benefits to those who would not normally qualify for it, dropped by 8,019 in the last week to 311,675. However, the number of people participating in the PUA emergency program, which helps those those who lost their benefits receive another 13 weeks of compensation, increased by 466 106 to 9.15 million, given that these figures are two weeks behind.
A new wave of coronavirus infections has swept the United States, with daily cases exceeding 100,000 since early November. More than 12 million people have been infected in the country, according to Reuters..
Respiratory disease has killed more than 257,000 Americans and has seen a steady increase in hospital admissions, prompting state and local governments to re-impose many restrictions on social and economic life in the past few weeks, which could likely keep the number of benefit claims higher. their peak at 665,000, which was observed during the Great Recession 2007-2009.
US stocks today showed mixed dynamics at the beginning of trading. The dollar fell against a basket of currencies. US Treasury Bond Prices Rise.
Jobless claims fell from a record 6,867,000 in March as about 80% of people temporarily laid off in March and April were rehired, accounting for much of the recovery in job growth over the past six months.
This improvement, which spilled over into the broader economy through high consumer spending, was driven by fiscal stimulus. In a separate report on Wednesday, the Commerce Department confirmed the historical pace of economic growth in the third quarter..
Gross Domestic Product grew 33.1% year on year according to government statement, based on re-evaluation performance in the third quarter of 2020. Second quarter economy The United States shrank 31.4%, the biggest decline since the government began keeping records in 1947.