WASHINGTON: The number of Americans filing new claims for unemployment benefits hovered at high levels last week, suggesting the labor market recovery from the COVID-19 pandemic was stalling.
Initial claims for state unemployment benefits were unchanged at a seasonally adjusted 884,000 for the week ended Sept. 5. Claims dropped from about 1 million the prior week after the government changed the methodology it used to address seasonal fluctuations in the data, which had become less reliable given the economic shock from the coronavirus crisis.
Government money was credited for the sharp rebound in economic activity, starting with record retail sales growth in May. A US$600 weekly unemployment supplement expired in July. Though President Donald Trump extended it through an executive order, it was cut to US$300 and a few states are offering the supplement. Economists expect funding for the supplement will be exhausted this month.
"It looks like the trends for both initial and continuing claims filings have flattened out lately after a period with more notable declines," said Daniel Silver, an economist at JPMorgan in New York."This is broadly consistent with the idea that the labor market recovery has lost momentum lately." It includes the PUA and another government-funded program for individuals who have exhausted their eligibility for the regular unemployment insurance, 26 weeks in most states.