New US jobless claims rise to 1.42 million amid COVID-19 surge

WASHINGTON - Claims for government benefits by newly unemployed American workers rose to 1.42 million last week, the Labor Department said Thursday, reversing weeks of declines as coronavirus cases skyrocket nationwide.

The increase defied analysts' expectations of another weekly decrease in new claims, which spiked in March as US businesses shut down to stop the spread of coronavirus put have been dropping since.

Adding to the toll were the 974,999 people in 49 states who applied for benefits under a program for workers who would not normally be eligible -- an increase of nearly 20,000 from the week prior.

However, in the week ended July 11, the insured unemployment rate indicating people actually receiving benefits declined 0.7 points to 11.1 percent, an indication that some people are returning to work.

"The overall message is that an economy able to recover well is stalling due to health concerns," chief economic advisor at Allianz Mohamed A. El-Erian said on Twitter.

The world's largest economy has seen a surge in COVID-19 infections as states roll back reopening measures, with nearly 64,000 new cases reported in the 24 hours to Wednesday, Johns Hopkins University said.

Some of the states seeing the biggest jumps in joblessness were also among those with the highest number of coronavirus cases, including Florida, where claims jumped 65,890 in the week ended July 11, the Labor Department said.

Agence France-Presse

Another 1.3 million workers file for US jobless benefits

WASHINGTON - Another 1.3 million US workers filed for unemployment benefits last week, as the slowdown in the pace of layoffs amid the coronavirus crisis continued, the government reported Thursday.

The figure for the week ended July 4 was 99,000 lower than the prior week, showing a steady decline as the world's largest economy gradually reopens and workers are recalled to their jobs.

But the level remains far higher than any pre-pandemic week. In the same week of 2019, only 211,000 people filed initial claims for jobless benefits.

The decline in the latest week slowed the four-week moving average to 1.44 million, the Labor Department reported, while 18 million remained on the jobless rolls through the week ended June 27.

President Donald Trump, who is counting on a strong economy to help in his tough reelection bid in November, has cheered the recent signs of recovery in the US labor market.

But economists and the Congressional Budget Office warn that it will take years for employment to return to pre-pandemic levels.

And the US could suffer a second wave of layoffs as more states see spiking case counts, and once expanded jobless benefits expire.

"Filings remain high and are declining at a stubbornly slow pace," said Rubeela Farooqi of High Frequency Economics. 

"We could see upward pressure in coming weeks in response to a surge in virus cases and related closures of businesses."

The unemployment rate in June dropped to 11.1 percent as 4.8 million jobs were added, with huge gains in the leisure and hospitality sector, which suffered the biggest blows from COVID-19 restrictions on travel and restaurants.

But Trump says the "crisis is being handled" and the economy is "roaring back."

Agence France-Presse

US layoffs surpass 38.6 million as lawmakers debate stimulus

WASHINGTON- Job losses in the United States are slowing but totaled an unheard-of 38.6 million since the coronavirus pandemic lockdowns began, while officials debate what additional steps will be needed to rescue the beleaguered economy.

Another 2.43 million Americans were put out of work last week, fewer than the previous week but still among the highest figures on record, according to the latest Labor Department data released Thursday.

Meanwhile, other reports showed US housing sales collapsed last month, while manufacturing continues to decline.

Initial claims for unemployment benefits appeared to have passed the peak hit in late March, but economists say joblessness is likely worse than the figures indicate since many people do not qualify for traditional aid.

"The dramatic spike in unemployment claims is trending down, but it still completely overshadows any precedent," Kate Bahn, director of Labor Market Policy at the Center for Equitable Growth, said on Twitter, noting that the latest number was three times higher than the record prior to the pandemic.

Democrats in Congress are calling for the Republican-controlled Senate to pass a $3.3 trillion spending measure approved by the House of Representatives last week to revitalize the economy, but President Donald Trump's administration has rejected the bill as he encourages more state government to loosen the lockdowns.

"We did the right thing, but we now want to get going... you'll break the country if you don't," he told African American leaders in a visit to Michigan, a key election battleground state.

The coronavirus pandemic has killed 93,406 people in the US and infected nearly 1.6 million others, according to John Hopkins University, despite widespread business shutdowns from mid-March to stop the virus's spread.

PARTISANS SPLIT

Weekly jobless claims declined but they remain well above any week during the 2008 global financial crisis and are more in line with job losses in the Great Depression last century.

"Forget the idea that they are coming down. If anyone thinks that 2.5 million new claims is anything but disastrous, they are deluding themselves," economist Joel Naroff said, warning that the economy is in the midst of a second round of layoffs.

The latest weekly number also does not include the 2.22 million people who applied for a federal program aimed at contractors and self-employed workers who would not normally qualify for traditional benefits.

House Speaker Nancy Pelosi pushed to approve the Heroes Act that includes $1 trillion for state and local governments, funds for hospitals, hazard pay for health workers, relief for devastated small businesses, and another round of cash disbursements to hard-hit US families -- measures many economists have been calling for.

But Treasury Secretary Steven Mnuchin, though acknowledging a "strong likelihood" additional aid will be needed, rejected Pelosi's effort as "obviously" partisan, and said officials will need to take some time to consider the next steps.

Pelosi fired back at Republicans, including Senate Majority Leader Mitch McConnell, for dragging their feet.

"Instead of telling laid-off workers to pause, Leader McConnell and the Senate GOP need to come to the negotiating table to help deliver the relief to protect lives and livelihoods."

HOME SALES PLUNGE

The Federal Reserve has rolled out trillions in new liquidity to ensure markets continued to function through the downturn, but the central bank's Chair Jerome Powell said additional government spending is necessary to spur a recovery.

During a video conference with community leaders across the country, Powell repeated earlier warnings of unprecedented economic uncertainty, saying "questions only the virus can answer complicate the outlook."

Adding to the building picture of the damage, the National Association of Realtors (NAR) said existing home sales -- a key sector in the world's largest economy -- plummeted in April, the first full month the lockdowns were in effect.

But realtors and economists are optimistic they will pick up quickly as the economy reopens due to very low borrowing rates.

Sales plunged 17.8 percent last month, dropping in all parts of the country, with sales in western states hit hardest, falling 25 percent compared to March.

NAR's Chief Economist Lawrence Yun said home sales have been "temporarily disrupted" by the pandemic but pointed to a year-on-year price increase of 7.4 percent as evidence that "listings that are on the market are still attracting buyers."

A Philadelphia Federal Reserve Bank monthly report released Thursday showed a slight improvement in manufacturing activity in the region the bank covers, though it was rebounding from a 40-year low in April.

Agence France-Presse

Millions more Americans file for jobless benefits as coronavirus layoffs widen

WASHINGTON - The global novel coronavirus crisis continues to batter the US labor market, with millions more Americans, including white collar workers, filing for unemployment benefits last week as the hit from the pandemic spills over into a broader swath of the economy.

Initial claims for state unemployment benefits totaled a seasonally adjusted 2.981 million for the week ended May 9, the Labor Department said on Thursday. While that was down from 3.176 million in the prior week and marked the sixth straight weekly drop, claims remain astoundingly high.

Economists polled by Reuters had forecast applications for unemployment benefits totaling 2.5 million in the latest week. Claims have been gradually decreasing since hitting a record 6.867 million in the week ended March 28.

The weekly jobless claims report, the most timely data on the economy's health, cements economists' expectations for a third straight month of massive job losses in May. The report came a day after Federal Reserve Chair Jerome Powell warned of an "extended period" of weak growth and stagnant incomes.

"We are on the back end of the first wave of layoffs, but now we are transitioning from the natural-disaster phase to the recession phase," said Josh Wright, chief economist at Wrightside Advisors in New York. "That's why so many white collar jobs are still being lost. We effectively amputated a large section of the economy, and we are going to limp along afterwards."

The economy lost a staggering 20.5 million jobs in April, the steepest plunge in payrolls since the Great Depression of the 1930s, as businesses were locked down to slow the spread of COVID-19, the respiratory illness caused by the virus.

Still, April was probably the trough in job losses during this economic downturn, which has also been marked by the sharpest decline in output since the 2007-09 Great Recession.

In addition to workers in industries and jobs not initially affected by the coronavirus shutdowns, economists attribute the continued elevation in claims to the processing of application backlogs, which accumulated as state unemployment offices were overwhelmed by the unprecedented wave of filings.

Many parts of the country are reopening and states and local governments are laying out plans to restart their economies. But with businesses and factories operating well below capacity, and fears of a second round of COVID-19 infections, economists do not anticipate a dramatic improvement in the labor market.

Some businesses have accessed loans from an almost $3 trillion fiscal package, which could be partially forgiven if they used the credit for employee salaries. But many small enterprises are expected to close permanently, leaving some of the 21.4 million people who lost their jobs in March and April out of work. 

(Reporting By Lucia Mutikani Editing by Chizu Nomiyama)

-reuters-

US jobless rate falls to 8.5% in big job surge

WASHINGTON - The US unemployment rate dropped to 8.5 percent in December, the lowest level in nearly three years, as hiring surged more than expected, government data showed Friday.

The Labor Department report confirmed an improving trend in the ailing job market. The department noted that the number of unemployed as well as the jobless rate "continued to trend down in December."

The economy added 200,000 nonfarm jobs last month, the department said, sharply higher than the average analyst estimate of 150,000.

The job gains occurred in transportation and warehousing, retail trade, manufacturing, health care, and mining, the department said.

Most analysts had expected the jobless rate to tick higher to 8.7 percent.

Instead, at 8.5 percent, the jobless rate was the lowest since February 2009, when the United States was battling the worst recession in decades. — Agence France Presse

source:gmanetwork.com