Initial Jobless Claims Unexpectedly Rise to 1.106 Million
Investing.com
Published Aug 20, 2020 08:27AM ET
By Noreen Burke
Investing.com -- The number of Americans applying for initial unemployment benefits unexpectedly increased to 1.106 million last week, adding to fears that the recovery in the labor market is stalling. The prior week's figure was revised up to 971,000 from 963,000.
Economists had forecast a decline to 925,000. The number of people claiming Pandemic Unemployment Assistance for the first time also rose by 53,000 to 543,000, suggesting that the rate of layoffs remains high despite the gradual reopening of the economy.
The number of continuing claims, which are reported with a one-week lag to initial claims, decreased to 14.844 million. The previous week's figure was also revised downwards to 15.480 million.
Including another 12.5 million or so Americans who are claiming Pandemic Unemployment Assistance, the total number of people claiming unemployment benefits as of August 1st fell by some 200,000 to 28.06 million.
The data comes a day after the minutes of the Federal Reserve’s July meeting showed that officials already see the rebound in the labor market slowing. The minutes also reiterated that the outlook for the economy hinges on the outlook for the virus.
The number of new coronavirus infections has eased markedly since last month, and is now at its lowest since June, but is still averaging over 40,000 a day, according to John Hopkins data.
The minutes also noted that since many provisions of the government's coronavirus fiscal relief package are due to expire while the labor market is still weak, "additional fiscal aid would likely be important for supporting vulnerable families, and thus the economy more broadly, in the period ahead."
Elsewhere, there was further evidence of the recovering flattening out as the Philadephia Federal Reserve's manufacturing index fell for a second straight month, and by more than expected, to 17.2. The employment subindex fell particularly sharply, while capital spending and new orders held up slightly better.
--Reuters contributed to this report
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