The pace of new applications for us jobless aid ticked higher and hovered at historically elevated levels last week, in a sign of continued weakness in the labour market as it struggles to rebound from damage inflicted by the pandemic.
Initial jobless claims totalled 870,000 on a seasonally adjusted basis, compared with 866,000 a week earlier, according to figures published by the department of labor on thursday. it was the fourth straight week that jobless claims had fallen below 1m, although economists had forecast claims to decline for a second consecutive week, to 840,000.
The number of americans actively collecting state jobless aid fell slightly to below 12.6m, from 12.7m for the week that ended on september 12, versus a peak of 24.9m in may. the insured unemployment rate, which measures continuing claims as a percentage of the workforce, was 8.6 per cent, down from 8.7 per cent.
The jobless claims data paint a picture of a labor market recovery thats struggling to maintain momentum, according to analysts at oxford economics.
The us has recovered nearly half of the 22m jobs that were lost in march and april during the height of coronavirus shutdowns. while daily infections in some areas have recently climbed, covid-19 outbreaks in the us south and west in june and july have abated, raising hopes for a steadier jobs recovery despite shutdowns that remain in force in several states and an impasse in washington over a new set of stimulus measures.
James knightley, chief international economist at ing, said recent data suggest that jobs growth has stalled. however, election-related tensions in washington make it less likely that a stimulus deal will materialise.
With covid-19 cases picking up again there are also worries about the reintroduction of new containment measures, similar to what we are now seeing again in europe, he added.
Talks between the white house and congress have been at a standstill with republicans and democrats remaining divided on the size and details of the legislation.
Earlier this week, the white house signalled that president donald trump would support separate bills for economic aid, urging democrats to back smaller relief packages such as airline funding. thousands of airline workers are expected to be furloughed after october 1 unless lawmakers reach a deal.
Federal reserve officials have warned this week that the us economys rebound could stall without additional stimulus beyond the roughly $3tn in aid that came early in the coronavirus crisis. jay powell, chair of the central bank, said the economy had been resilient, but added: i think that it is likely that more fiscal support will be needed.
The jobless claims report showed that 26m people were claiming benefits in state and federal programmes as of september 5, a decline from 29.8m, according to unadjusted figures that are reported on a two-week delay. a sharp drop in pandemic unemployment assistance beneficiaries accounted for most of the decline. the overall tally also includes another cares act measure that extended unemployment benefits for up to 13 weeks.
There were 630,080 first-time claims last week in the federal pua programme, which offers benefits to the self-employed or other individuals who would not qualify for regular unemployment compensation. that was down from 675,154 the week before.
California, the most populous us state, announced at the weekend that it would stop accepting jobless claims for the next two weeks as it attempts to tackle fraud and work through a backlog of applications.
New york, georgia, california, massachusetts and new jersey were the biggest contributors to last weeks uptick in new jobless claims, according to advance figures that are not seasonally adjusted. illinois, michigan and louisiana recorded fewer claims.