Fri, 14 Aug 2020

Applications for unemployment benefits in the US declined last week by more than projected, easing concerns of a renewed downturn in the labor market after several large states reported a pickup in coronavirus cases.

Initial jobless claims in regular state programs fell by 99 000 - the most in a month - to 1.31 million in the week ended July 4, Labor Department data showed Thursday. The median forecast in a Bloomberg survey of economists called for 1.375 million.

Continuing claims - the total number of Americans claiming ongoing unemployment benefits in state programs - declined to 18.1 million in the week ended June 27, compared with a median projection of 18.8 million.

Job losses and unemployment rolls remain stubbornly high and labor-market gains may still be at risk of stalling in coming weeks. Several states - including Texas and Florida - have delayed or walked back reopening plans, and a cohort of rehired workers has found themselves out of work once again.

A separate report Thursday showed consumer confidence cooled for the first time in seven weeks amid the renewed outbreaks, raising the prospects of a tempering in the economic recovery.

With the federal government paying an extra $600 in weekly unemployment benefits through the end of July, employers may be allowing some people to go back and forth between working and filing for benefits, which is "wreaking havoc on the data," said Stephen Stanley, chief economist at Amherst Pierpont Securities.

Economists' estimates of initial claims ranged from 1.2 million to 1.9 million. The data can be volatile in weeks around a holiday, and July 4 was Independence Day in the US, with the holiday observed on Friday.

The total number of unadjusted continuing claims in all programs rose to 32.9 million in the week ended June 20, though this figure likely reflects an overcount of reported PUA continued claims - in some cases reflecting the number of retroactive weeks claimed rather than individual people.

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