Amer­i­can un­em­ploy­ment claims fall be­low a mil­lion

The Daily Telegraph - Business - - Business - By Lizzy Bur­den

THE num­ber of Amer­i­cans fil­ing a new claim for un­em­ploy­ment ben­e­fits dropped be­low a mil­lion for the sec­ond time since the start of the pan­demic.

Ini­tial claims for state un­em­ploy­ment ben­e­fits fell 130,000 to a sea­son­ally ad­justed 881,000 for the week end­ing Aug 29, ac­cord­ing to fig­ures from the US La­bor De­part­ment.

How­ever, Nancy Van­den Houten of Ox­ford Eco­nom­ics said the fall was due more to a change in how the de­part­ment sea­son­ally ad­justed its data than an im­prove­ment in the labour mar­ket. Non-sea­son­ally ad­justed claims in­creased by 151,674 to 759,482 peo­ple from the week be­fore.

“The data show that lay­offs re­main wide­spread and the re­cov­ery in the labour mar­ket is oc­cur­ring at a frus­trat­ingly slow pace,” she said. “Sea­son­ally ad­justed or not, a lot of peo­ple are still out of work.”

Un­em­ploy­ment fil­ings peaked in March as busi­nesses shut down to stop the spread of the virus but have de­clined since. The num­ber of claims is grad­u­ally re­turn­ing to pre-pan­demic lev­els but is still much higher than in any week of the global fi­nan­cial cri­sis. A to­tal of 29.2m peo­ple were on the dole in the week to Aug 15, the lat­est data avail­able – an in­crease of 2.2m.

“While Wall Street hits record highs, much of Main Street re­mains in se­vere dis­tress,” Ron Tem­ple at Lazard As­set Man­age­ment said. “The pan­demic and the fed­eral fail­ure to sus­tain nec­es­sary as­sis­tance to house­holds as well as state and lo­cal gov­ern­ments are weak­en­ing long-term eco­nomic growth and so­cial sta­bil­ity in the US.”

Af­ter the $600 (£452) weekly un­em­ploy­ment sup­ple­ment ex­pired in July, Don­ald Trump signed an ex­ec­u­tive or­der in­clud­ing a pro­vi­sion ex­tend­ing it at a re­duced rate of $400.

How­ever, state gover­nors have said deal­ing with the pan­demic has left them with­out the means to cover the $100 of the ben­e­fits they are obliged to con­trib­ute.

Look­ing ahead, An­drew Hunter of Cap­i­tal Eco­nom­ics said to­day’s jobs re­port was likely to show that em­ploy­ment con­tin­ued to re­bound last month.

How­ever weak de­mand in sec­tors such as leisure and hos­pi­tal­ity meant “the labour mar­ket re­cov­ery is likely to re­main rel­a­tively un­der­whelm­ing”.

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