Last week’s unexpected rise in US weekly job claims adds to concerns over US economic recovery
A fresh rise in the number of Americans filing new unemployment benefit claims has added to concerns over the country’s economic recovery.
In a report by the US Labor Department, figures showed that initial jobless claims rose to 870k during the week ended 19 September, higher than the previous week’s upward-revised figure of 866k and well overshot of the 840k forecast.
Jobless claims remain elevated at three times higher than pre-pandemic levels, and still well above the previous peak of 665k (registered in February 2009 during the Great Recession). Meanwhile, continuing claims rose to 12.58 million last week, beating the forecast of 12.3 million but remaining below the previous week’s figure of 12.74 million.
Job cuts have spread to the financial services and technology sectors, too – areas that were not initially impacted during lockdown closure due to insufficient demand.
In recent weeks, the US Federal Reserve has – in addition to pumping money into the economy – reduced interest rates to near zero and pledged to keep borrowing costs low for at least two years. However, talks over a much-needed fiscal stimulus package remain stuck in Congress, with further delays likely to add more negative pressure to an already-struggling economic recovery process.