Weekly Jobless Claims Rise as Recovery Stalls
Initial weekly Unemployment Insurance claims increased as COVID-19 continues to grip the U.S. Seasonally adjusted initial claims were 1.416 million for the week ending July 18, and the totals for the week ending July 11 were revised up by 7,000 to 1.307 million. While the 109,000 rise in weekly initial claims is worrisome for the stability of the recovery, the latest continued claims estimate dropped by 1.1 million. Continued claims decreased by 6.4% from the prior week, to 16.2 million for the week ending July 11.
This is the first increase in initial unemployment claims since March 28. New infections are altering the recovery course, as recent spikes of COVID-19 infections make bringing back or hiring employees more difficult. LaborIQ by ThinkWhy now estimates unemployment at 16.2% using Unemployment Claims. The increased infections have caused restrictions to be reimposed, adversely affecting or halting business activity.
This is the last week of the supplemental $600 per week federal unemployment benefit, as lawmakers debate the scope of the next economic stimulus package. The supplemental unemployment benefit, many argue, is not just helping individuals but pumping much-needed cash into the economy.
With new infections extending the strain on businesses, the recovery is off to a slower-than-expected start. Despite some recent recovery signs, increasing or even flat initial weekly unemployment claims indicate the pandemic is tightening its negative grip on the U.S. economy. Fiscal policy will continue to steer the recovery as growth stalls and the debate continues over expiring benefits. LaborIQ by ThinkWhy expects initial jobless claims for July to hover around 6.3 million.
ThinkWhy continuously monitors and forecasts labor data at all levels, measuring impact to MSAs, industries, occupations, and businesses across the U.S.