US jobless claims fall below 1m; Europe air travel may drop

WASHINGTON: The number of Americans seeking unemployment benefits dropped below one million last week for the first time since the start of the COVID-19 pandemic in the United States, but that was likely as the expiration of a $600 weekly supplement discouraged some from filing claims.

The report from the labour Department on Thursday did litle to change economists’ views that the jobs market recovery was faltering. Data from payroll scheduling and workforce management firms suggested a decline in employment in early August due to the spread of new COVID-19 cases across the United States.

Initial claims for state unemployment benefits decreased 228,000 to a seasonally adjusted 963,000 for the week ended Aug. 8. That was the lowest level since mid-march when authorities started shuting down non-essential business to slow the spread of the novel coronavirus. Economists polled by Reuters had forecast 1.12 million applications in the latest week. Claims peaked at a record 6.867 million in late March. Even with last week’s decrease, claims are well above their 695,000 peak during the 2007-09 Great Recession. A total 28.3 million people were receiving unemployment checks at the end of July.

There were big declines in claims last week in Florida, Georgia and California, some of the states that have been hardest hit by new waves of coronavirus infections. Businesses in some areas in these states have been shut down again and in some instances, reopenings have been paused.

Data from Homebase, a payroll scheduling and tracking company, showed a decline in employment last week. Figures from Kronos, a workforce management sotware company, showed a flatening in the number of shits worked.

The government reported last week that the economy created 1.763 million jobs in July ater adding a record 4.791 million in June. It has regained only 9.3 million of the 22 million jobs lost between February and April.

The $600 extra unemployment benefit lapsed on July 31. President Donald Trump on Saturday signed an executive order that included an extension of the supplement, though he reduced the weekly payout to $400.

But there has been confusion over the order. States are required to cover $100 of the benefit, but governors have said they don’t have the financial capacity ater revenues were decimated in the fight against the pandemic.

The remaining $300 will be funded from a limited emergency disaster relief programme, which economists estimated could be depleted as early as September.

Thursday’s claims report also showed the number of people receiving benefits ater an initial week of aid fell 604,000 to 15.486 million in the week ending Aug. 1.

US stocks inched towards record highs on Thursday following a drop in first-time unemployment claims and indications US lawmakers are still seeking common ground on an economic rescue package.

While the Dow was down in late morning trading, both the broader S&P 500 and techheavy Nasdaq Composite advanced modestly to near record highs.

Europe’s main stock markets failed to get any traction from the US jobs data and ended lower.

There is also a focus on this weekend’s USChina talks to review their trade pact signed in January.

There have been concerns that rising tensions between the superpowers could scupper the agreement, which ended, or at least called a truce in a painful and long-running trade war that batered the global economy.

Oil prices edged lower, as the International Energy Agency cut its 2020 forecast for global oil demand to 91.9 million barrels per day, the first downgrade in a number of months.

EUROPE AIR PASSENGER: Air passenger numbers in Europe are expected to drop by 60 per cent in 2020 due to the coronavirus crisis, the global aviation industry said on Thursday, with the recovery looking highly uncertain.

Although air traffic in Europe has increased in recent months since its low point in April, flights remain “more than 50 percent below the same period in 2019” -- a drop of around 705 million passenger journeys, said the International Air Transport Association. “The near-term outlook for recovery in Europe remains highly uncertain with respect to the second wave of the pandemic and the broader global economic impact it could have,” IATA said in a statement.

IATA estimated that more than seven million jobs supported by aviation, including in the tourism industry, were now “at risk”.