Continued Jobless Claims Spike While Weekly Claims Rise Slightly
Initial weekly Unemployment Insurance claims increased for the second straight week as COVID-19 continues to grip the U.S. economy. Seasonally adjusted initial claims were 1.434 million for the week ending July 25, and totals for the week ending July 18 were revised up by 6,000 to 1.422 million. The increase in initial claims of 12,000 was modest compared to the rise in continued claims, though the larger increase was expected. Continued claims increased by 867,000 to just above 17 million for the week ending July 18, up 5% from the prior week.
New virus infections are altering the recovery course. The Consumer Confidence Index reported by the Conference Board was lower in July (at 92.6) than in June (98.3) and came in below expectations. LaborIQ by ThinkWhy now estimates unemployment at 16.3% using Unemployment Claims.
U.S. Gross Domestic Product (GDP), which measures the country’s output, fell by a record 32.9% in Q2 2020, according to the Bureau of Economic Analysis. Data from the July 16-July 21 Census Household Pulse Survey indicates that 35% of people expect that someone in their household will experience a loss of employment income in the next four weeks. Of those who had used Unemployment Insurance on spending needs in the seven days prior, 70.3% expect themselves or someone in their household to lose employment income in the next four weeks.
All this comes as Congress determines the future of the supplemental unemployment benefit and considers the next round of stimulus payments. The $600-per-week supplemental jobless benefit under the CARES Act expires July 31. The benefit, many argue, is not just helping individuals but pumping much-needed cash into the economy. Republicans have recommended decreasing the benefit to $200 weekly through September, then paying 70% of prior income capped at $500 per week. Democrats would like to extend the current benefit until January of next year.
With new infections extending the strain on businesses, the recovery is off to a slower-than-expected start. Despite some recent recovery signs, weekly unemployment claims indicate the pandemic is tightening its negative grip on the U.S. economy, and LaborIQ by ThinkWhy expects initial jobless claims for July to hover around 6.2 million.
ThinkWhy continuously monitors and forecasts labor data at all levels, measuring impact to MSAs, industries, occupations, and businesses across the U.S.