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US jobless claims little changed, some economists say jobs market stalling

By Abigail Townsend

Date: Thursday 24 Sep 2020

US jobless claims little changed, some economists say jobs market stalling

(Sharecast News) - The pace of improvement in US jobless claims slowed last week, government data showed on Thursday, as America's labour market looked to have stalled.
Initial jobless claims for the week to 19 September were 870,000, up from 866,000 for the previous week - which itself was revised upwards by 6,000 from a preliminary estimate - and missing consensus for a fall to 840,000.

The four-week moving average on the other hand printed at 878,250, a decrease of 35,250 on the previous week's revised average.

The advance seasonally-adjusted insured unemployment rate was 8.6% for the week to 12 September, a decrease of 0.1 percentage point on the previous week, which was revised up to 8.7%.

Continuing claims, those which are not being filed for the first time and which are correlated to hiring, eased by 167,000, to roughly 12.58m, and were also above consensus, with most economists looking for around 12.28m.

Secondary or continuing unemployment claims always reference the week next to last, or the seven-day stretch until 7 September in this case.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, called the data "ominous and disappointing", noting: "The labour market is stalling.

He continued: "Consumers' spending - nearly 70% of the economy - can't continue to increase at its recent pace in the aftermath of the ending of enhanced unemployment benefits. The latest upturn in Covid-19 cases and hospitalisations threatens to trigger renewed restrictions on economy activity, while inducing people to reduce their social interactions."

A $600-a-week federal supplement to jobless aid, introduced in March in response to the Covid-19 pandemic, came to an end on 31 July.

Neil Wilson, chief market analyst at Markets.com, said: "The road to recovery is a winding one. US initial jobless claims rose last week, indicating weakness in the labour market as the country struggles out of recession.

"The rise in initial claims is a worry that the momentum in the labour market has faded, which would chime with the kind of warnings that Federal Reserve officials have been laying on thick this week."

On Wednesday, Fed chair Jerome Powell told a congressional panel that while there had been a "marked improvement" in the US economy in recent months, "the path ahead continues to be highly uncertain". He added: "A full recovery is likely to come only when people confident it is safe to re-engage in a broad range of activities".

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