New US jobless claims at 778000, second week of increase

  • New US jobless claims at 778000, second week of increase

New US jobless claims at 778000, second week of increase

New applications for unemployment aid in Florida continue to tumble - though slowly.

Initial jobless claims in regular state programs increased by 30,000 to 778,000 in the week ended November 21, according to Labor Department data Wednesday.

Nationally, the number continues to climb.

Applications for USA state unemployment benefits unexpectedly posted the first back-to-back weekly increase since July, while Americans' incomes and savings fell last month.

The total number of people who are continuing to receive traditional state unemployment benefits dropped to 6.1 million from 6.4 million the previous week.

Another 311,000 people applied for jobless benefits under an emergency federal program for gig workers and the self-employed, who typically are not eligible for unemployment. "Nationally, we are in a situation where you have a very large number of people filing for unemployment benefits and while there had been a decrease leading up to two weeks ago, we're still seeing national levels higher than those posted at the height of the financial crisis 10 years ago".

The Labor Department typically releases its unemployment report on Thursdays, but did so a day early due to the Thanksgiving holiday.

The benefits, part of a more than US$3 trillion government coronavirus relief package which has largely expired, contributed to record economic growth in the third quarter.

Continuing claims - the total pool of Americans on ongoing state unemployment benefits - fell by 299,000 to 6.07 million in the week ended November 14.

Wednesday's data indicate the economic rebound is becoming more tenuous amid soaring coronavirus cases, fresh lockdowns and an extended deadlock in Congress over a new stimulus package. More than 12 million people have been infected in the country, according to a Reuters tally of official data. These benefits, as well as those for gig workers and the self-employed will lapse on Dec 26.

That and the ebb in consumer confidence amid the raging pandemic cast doubts on the sustainability of strong spending.

Consumers increased their spending last month by just 0.5%, the weakest rise since the pandemic erupted. Economists had forecast spending rising 0.4 percent.

"Were it not for recent virus-related developments, it looks like GDP would be on track for a pretty robust fourth quarter", said Daniel Silver, an economist at JPMorgan in NY.

Gripped by the accelerating viral outbreak, the USA economy is under pressure from persistent layoffs, diminished income and nervous consumers, whose spending is needed to drive a recovery from the pandemic.

A fourth report from the department showed after-tax profits without inventory valuation and capital consumption adjustment, which corresponds to S&P 500 profits, rebounded at a 36.6% annualized rate in the third quarter after two straight quarterly declines. In a separate report on Wednesday, the Commerce Department confirmed the economy's historic pace of expansion in the third quarter. Mark Zandi, chief economist at Moody's Analytics, predicts annual GDP growth of around 2% in the October-December quarter, with the possibility of GDP turning negative in the first quarter of 2021.