The U.S. economy has moved sideways for the past six weeks and it appears that improvement in the labor market has begun to stall as initial claims for unemployment benefits increased for the second straight week.
The increase of 1.434 million in first-time claims marked the 19th week above 1 million.
First-time jobless claims increased by 1.434 million for the week ending July 25, the Labor Department reported on Thursday, while continuing claims increased by 17.01 million, implying an increase to an 11.6% insured unemployment rate.
Once one includes those receiving federal Pandemic Unemployment Compensation, the number of people receiving aid climbs to 2.2 million. Through the week of July 11, there were 30.2 million people receiving some form of unemployment insurance in the country.
Given that the economy is facing a series of policy cliffs that are affecting the public, we think that the uncertainty produced among both firms and households will result in the further pulling back of consumption and the recall of workers to their pre-pandemic jobs. The risks to the July and August U.S. employment reports are rising.
The top-line increase of 1.43 million represents the 19th week of first-time claims above 1 million. Over that time, roughly 54.1 million people have experienced some form of unemployment and income losses.
For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.
