U.S. weekly jobless claims fall marginally

In this news, we discuss the U.S. weekly jobless claims fall marginally.

WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits edged down last week, but remained extraordinarily high as the economic recovery faltered as the COVID-19 pandemic intensified and as the fiscal stimulus ended.

The state’s initial jobless claims totaled 751,000 seasonally adjusted for the week ended Oct. 31, up from 758,000 the week before, the Labor Department said Thursday. Economists polled by Reuters had forecast 732,000 candidates last week.

The economy could be plunged into a period of uncertainty following Tuesday’s presidential election, which raised the specter of a contested outcome, potentially undermining business investment and delaying a much-needed second government back-up plan against coronaviruses.

Democrat Joe Biden moved closer to victory on Thursday, as President Donald Trump alleged fraud without providing evidence, suing and calling for recounts in a race yet to be decided two days after the polls closed.

With a quick budget package unlikely as politics takes center stage, the focus will be shifted to the Federal Reserve to pump more money into the economy. The US central bank is expected to keep interest rates close to zero when policymakers conclude a two-day policy meeting later on Thursday.

Although first-time jobless claims fell from a record 6.867 million in March, they remain perched above their peak of 665,000 during the great recession of 2007-09.

More than $ 3 trillion in government pandemic assistance for businesses and workers fueled a historic annualized economic growth rate of 33.1% in the third quarter. This followed a record contraction rate of 31.4% in the April-June quarter.

The lack of fiscal stimulus and the surge in new coronavirus infections across the country have put the economy on a significantly slower growth path as the fourth quarter approaches. Wednesday’s reports showed private payrolls growing less than expected in October and activity in the service sector was cooling.

The closely watched government employment report on Friday is expected to show non-farm workforces increased by 600,000 jobs in October after rising by 661,000 in September, according to a Reuters survey of economists. That would leave employment 10.1 million jobs below its February peak.

Exploding COVID-19 cases across the country and cooler weather are expected to weigh on already lackluster demand for services like air travel, hotel accommodation and gym memberships, as well as for eating and drinking in restaurants and bars.

The service sector, which accounts for more than two-thirds of the US economy, has been hit hardest by the pandemic, making it difficult to recover the 22.2 million jobs lost during the crisis.

Reporting by Lucia Mutikani; Editing by Andrea Ricci

Original © Thomson Reuters

Originally posted 2020-11-05 05:46:11.

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