US weekly jobless claims spike first time in four months

Washington: The number of Americans filing unemployment benefits rose last week for the first time in nearly four months, suggesting the labor market was stalling amid a resurgence in new COVID-19 cases and depressed demand.

Initial claims for unemployment benefits increased to a seasonally adjusted 1.416 million for the week ended July 18, from 1.307 million in the prior week. That was the first weekly rise in applications since the week ending March 28, when claims raced to a record 6.867 million as nonessential businesses like restaurants and gyms shuttered to slow the spread of the coronavirus.

Cases of the respiratory illness have exploded across the country, prompting some authorities in hard-hit South and West regions to either shut down businesses again or pause re-openings. Workers being sent back home again are joining a second wave of layoffs, triggered by lack of demand as the economy battles a recession, which started in February.

Economists expect job growth to pull back this month after surging by a historic 4.8 million in June. Employment last month was boosted by the government’s Paycheck Protection Programme, which provides businesses loans that can be partially forgiven if used for wages. Though the PPP was extended to August 8, many small businesses drew their loans in May and June.