U.S. weekly jobless claims rise as COVID-19 infections surge

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In this news, we discuss the U.S. weekly jobless claims rise as COVID-19 infections surge.

WASHINGTON (Reuters) – The number of Americans filing for the first time for unemployment benefits rose again last week, suggesting an explosion in new COVID-19 infections and trade restrictions were increasing layoffs and undermined the recovery of the labor market.

Other data from Wednesday showed that corporate capital spending remained strong into the start of the fourth quarter, although momentum has slowed from previous months. The economy is shifting at a slower pace as the government’s coronavirus boost of more than $ 3 trillion ends.

Another bailout is not expected until after President-elect Joe Biden is sworn in on January 20. President Donald Trump is heavily focused on challenging his electoral defeat to Biden.

“There is a two-tiered recovery from the pandemic recession where the top of society continues to spend normally while the bottom half of the country lines up at food banks with few and far between job opportunities,” he said. said Chris Rupkey, chief economist at MUFG in New York.

Initial claims for state unemployment benefits rose from 30,000 to 778,000 seasonally adjusted for the week ended Nov. 21, the Labor Department said on Wednesday. This was the second consecutive weekly increase in claims. Economists polled by Reuters had forecast 730,000 candidates last week.

The weekly claims report, the most recent data on the health of the economy, was released a day earlier due to Thursday’s Thanksgiving holiday.

Unadjusted claims jumped from 78,372 to 827,710 last week. Economists prefer the unadjusted number because of the earlier difficulties in adjusting loss data for seasonal fluctuations due to the economic shock caused by the pandemic.

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Including a government-funded program for the self-employed, small workers and others who do not qualify for regular state unemployment programs, 1.14 million people filed claims last week. There were at least 20.5 million people receiving unemployment benefits in early November.

The United States has come under fire with a new wave of coronavirus infections, with daily cases exceeding 100,000 since early November. More than 12 million people have been infected in the country, according to a Reuters tally of official data.

Respiratory disease has killed more than 257,000 Americans and hospitalizations are skyrocketing, prompting state and local governments to reimpose a host of restrictions on social and economic life in recent weeks, which could keep claims above their mark. peak of 665,000 recorded during the Great Recession of 2007-09. .

US stocks were mixed in early trading. The dollar plunged against a basket of currencies. US Treasury prices have gone up.

RECORD GROWTH IN THE THIRD QUARTER

Unemployment claims fell from a record 6.867 million in March as around 80% of those temporarily laid off in March and April were rehired, accounting for most of the rebound in job growth in the past six months.

This improvement, which spread throughout the economy thanks to robust consumer spending, was boosted by the fiscal stimulus. In a separate report Wednesday, the Commerce Department confirmed the historic pace of the economy’s expansion in the third quarter.

Gross domestic product grew at an unrevised annualized rate of 33.1%, the government said in its second estimate of third-quarter production. The economy contracted at a rate of 31.4% in the second quarter, the deepest since the government began keeping records in 1947.

Reporting by Lucia Mutikani; Additional reporting by Dan Burns, edited by Chizu Nomiyama

Original © Thomson Reuters

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