WASHINGTON: The number of Americans filing first-time claims for jobless benefits increased further last week, suggesting that an explosion in new COVID-19 infections and business restrictions were boosting layoffs and undermining the labour market recovery.
"There is a two-tier recovery from the pandemic recession where the top of society continues to spend as normal while the bottom-half of the country sits in long lines at food banks with the opportunities for employment few and far between," said Chris Rupkey, chief economist at MUFG in New York. Including a government-funded program for the self-employed, gig workers and others who do not qualify for the regular state unemployment programs, 1.14 million people filed claims last week. There were at least 20.5 million people collecting unemployment benefits in early November.
Stocks on Wall Street were mostly lower. The dollar fell against a basket of currencies. US Treasury prices rose.Though the claims report showed the number of people receiving benefits after an initial week of aid declined 299,000 to 6.071 million in the week ending Nov 14, that was because many have exhausted their eligibility, which is limited to six months in most states.
"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 New York."But given the recent surge in new COVID-19 cases, we think that the data will soften noticeably in November and December."
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 per cent annualized rate in the third quarter after two straight quarterly declines.