Numbers: The number of Americans applying for unemployed benefits rose for the second straight week, a sign economic growth may come to a halt in late July. Claims were on a steady decline after peaking in late March.
The Labor Department said on Thursday that the initial unemployment claim increased from 12,000 to 1.434 million in the week ended July 25. Economists surveyed by MarketWatch looked for 1.51 million new claims. A new federal relief program for so-called “gig” workers, such as Uber drivers, totaled 829,607 last week.
The number of people already collecting economic benefits, known as continuing claims, increased from 867,000 to 17.06 million. These claims are stated with an interval of one week. This is a sign that workers are staying longer on the unemployment roll and resuscitation has slowed. This is the first increase in claims issued since late May.
What happened: Seasonal adjustment factors are wreaking havoc with this month’s figures. Claims in July take note of automakers’ annual summer shutdowns, but auto plants remain open after their forced closure in April. Nevertheless, claims have been stubbornly high.
big picture: The layoffs are increasing as the virus spreads throughout the South and West and bars and restaurants are forced back into operations, economists said. Strong job gains in May and June had increased optimism about the labor market, but economists are now worried that nonfarm payroll gains may weaken in July. The economy added 4.8 million jobs in June. The government will report employment figures on 7 August.
What are they saying “The risk of permanent job loss becoming permanent is greater than the repeated closure of businesses. Chief US economist in high frequency economics, Rubella Farooqui, said this could be due to the slow pace of recovery.
Market reaction: The stock fell sharply following jobless claims and a historic fall in second-quarter GDP. Dow Jones Industrial Average DJIA,
It was down 400 points in morning trading.