US weekly jobless claims push lower; labour market momentum slowing

Washington 

The Daily Tribune - www.newsofbahrain.com

The number of Americans filing new claims for jobless benefits declined more than expected last week, though they remain extremely high indicating a slowdown in the labor market and broader economic recovery from the COVID-19 pandemic as the boost from fiscal stimulus fades.

Initial claims for state unemployment benefits totaled a seasonally adjusted 787,000 for the week ended Oct. 17, compared to 842,000 in the prior week, the Labor Department said on Thursday. Economists polled by Reuters had forecast 860,000 applications in the latest week.

Claims have been stuck above their 665,000 peak during the 2007-09 Great Recession, though they have declined from a record 6.867 million in March. A more than $3 trillion rescue package early this year provided a life-line for many businesses, allowing them to keep workers on payrolls. It also lifted economic activity from the downturn, which started in February.

With funding depleted, businesses, especially in the transportation industry, are either laying off or furloughing workers as demand remains subdued.

Economists are predicting claims will remain elevated amid a resurgence in new coronavirus cases around the country, which they say could lead to state and local government restrictions or more people shunning establishments like restaurants and bars.