More than a million people applied for unemployment benefits in the past week, Labor Department data showed Thursday, underscoring the depth of the devastating impact of the coronavirus pandemic on the United States economy.
In total, new unemployment claims have exceeded 1 million for 19 consecutive weeks, with more than 50 million now out of the workforce. These were the main results of the report, compared to the consensus estimates compiled by Bloomberg:
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Initial jobless claims, week ending July 25: 1,434 million vs. 1,445 million expected and 1,416 million during the previous week
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The continuous week of unemployment claims ended on July 18: 17.01 million vs. 16.2 million expected, 16,197 million during the previous week
Combined with the second-quarter gross domestic product data that was the worst on record, the latest jobless claims underscored the relentless effect of the COVID-19 crisis on a struggling US recovery as new diagnoses accelerate the economy.
Thursday’s unemployment data shows the urgency faced by Congress and the White House as they negotiate the details of a new stimulus tranche to mitigate the consequences of the pandemic.
At least 54 million jobless claims have been filed since the COVID-19 crisis began.
A key point is whether and for how long the $ 600 supplemental unemployment benefit will be extended. At least some economists have argued that money originally designed to be a lifeline for the working class has now become a perverse incentive, with some earning more at home than at work.
Veteran market analyst Peter Boockvar said Wednesday that Washington’s warring political factions are likely to come “somewhere in the middle” of a range between a lower figure of $ 200 than Republicans and the current payment of $ 600.
Either way, it will be lower than it was where the University of Chicago estimated that 68% of those receiving benefits received more than they paid before with the average payment 34% higher than their previous weekly paycheck. Boockvar said.
“The exchange rate is the most relevant thing here, and therefore the law of diminishing returns is important,” he added.
The Federal Reserve held interest rates near zero on Wednesday as the central bank continues efforts to support a recovery. However, Fed President Jerome Powell said the high-frequency data pointed to an economy that appears to have slowed since COVID-19 cases began to rise in mid-June, adding to a count. of nearly 4.5 million infections and kills more than 150,000.
“Overall, the data appears to point to a slowdown in the pace of the recovery,” Powell said, adding that consumer surveys appear to be “softening again,” while labor market indicators pointed to a slowdown in growth. job growth, particularly among small businesses.
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