US: Initial Claims rise again, a sign the recovery is stalling – Wells Fargo
|Data released on Thursday showed that last week initial jobless claims rose for the first time since March. Analysts at Wells Fargo point out it is a sign that the economic recovery in the US is stalling.
Key Quotes:
“In one of the clearest signs yet that the U.S. recovery is stalling, initial jobless claims rose to 1.42M for the week ending July 18, from 1.31M the prior week. That marks the first increase since the end of March as re-imposed restrictions on businesses activity have taken a toll on employment. The rise comes during the Bureau of Labor Statistics’ survey week for nonfarm payrolls and suggests another sizeable monthly increase in payrolls for July, set to be released on August 7, is unlikely to be in the cards.”
“Granted, seasonal factors may have distorted the topline number this week, as fewer summer shutdowns at auto manufacturers in early July led to a smaller drop in claims mid-month than in recent years”
“More positively, continuing claims under regular state benefits fell 1.1M in today’s report.”
“The 18th consecutive week of initial claims over one million illustrates the relentless nature of the current crisis. Currently there are 32 million individuals receiving unemployment benefits through either regular state programs or the Pandemic Unemployment Assistance program, passed under the CARES Act in late March.”
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