The numbers: The number of Americans claiming unemployment benefits rose for the second consecutive week, a sign that economic growth could stall at the end of July. The claims had declined steadily after peaking in late March.
Initial unemployment claims rose 12,000 to 1,434 million in the week ending July 25, the Department of Labor said Thursday. Economists surveyed by MarketWatch were looking for 1.51 million new claims. A new federal utility for so-called “gig” workers such as Uber drivers last week was 829,607.
The number of people who are already collecting economic benefits, known as ongoing claims, increased by 867,000 to 17.06 million. These claims are reported with a one week delay. This is a sign that workers have been on the unemployment list longer and recruitment has been delayed. It is the first increase in recurring claims since late May.
What happened: Seasonal adjustment factors are causing major damage this month. Claims in July account for annual summer stops from automakers, but auto factories remain open after their forced shutdown in April. Nevertheless, the claims remain stubbornly high.
Big picture: Layoffs are on the rise as the virus spreads south and west, and bars and restaurants are forced to cut back on their activities, economists said. Strong job gains in May and June had heightened optimism about the labor market, but economists are now concerned that non-agricultural wage increases may be weaker in July. The economy provided 4.8 million jobs in June. The government will report employment figures for July 7 August. On Wednesday, Federal Reserve Chairman Jerome Powell said the labor market “still has a long way to go to recover.”
Market response: Futures contracts indicated a lower start for US equity indices on Thursday. The Dow Jones Industrial Average DJIA,
increased 160 points and closed on Wednesday at 26,539.