The numbers: The number of Americans applying for unemployment benefits increased for the second consecutive week, a sign that economic growth may be stagnant in late July. Claims had declined steadily after peaking in late March.
Initial jobless claims rose by 12,000 to 1,434 million in the week ending July 25, the Labor Department said Thursday. Economists surveyed by MarketWatch had been searching for 1.51 million new claims. A new federal aid program for so-called “concert” workers, like Uber drivers, totaled 829,607 last week.
The number of people who are already receiving financial benefits, known as continuing claims, increased by 867,000 to 17.06 million. These claims are reported with a delay of one week. This is a sign that workers are staying longer on unemployment charts and rehiring has slowed down. It is the first increase in continuous claims since the end of May.
What happened: Seasonal adjustment factors are wreaking havoc on this month’s data. Claims in July take into account automakers’ annual summer closings, but auto plants remain open after their forced shutdown in April. Still, claims remain stubbornly high.
Big picture: Layoffs are increasing as the virus spreads across the south and west and bars and restaurants are forced to curtail operations, economists said. Strong job increases in May and June fueled optimism about the labor market, but economists are now concerned that non-farm payroll earnings may be weaker in July. The economy added 4.8 million jobs in June. The government will report July employment data on August 7. On Wednesday, Federal Reserve Chairman Jerome Powell said the job market “has a long way to go to recover.”
Market reaction: Futures contracts pointed to a lower start for the US stock indices on Thursday. The Dow Jones Industrial Average DJIA,
It rose 160 points to close at 26,539 on Wednesday.
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