US jobless claims rise as economic recovery stalls
The number of Americans making new claims for unemployment benefits rose slightly last week amid worrying signs that the economic recovery was stalling.
There were 870,000 jobless claims last week, up from 866,000 for the week ending 12 September, according to figures from the US Labor Department.
The rise came as a shock to economists, who had forecast a fall to 840,000 benefit claims.
Although the figure is far lower than when coronavirus first forced states and businesses into lockdown, it is still far higher than at any point before the pandemic.
At their peak in March, weekly jobless claims hit an astonishing 6.9m, with the unemployment rate soaring to 14.7 per cent in April.
In contrast, the highest weekly jobless claims figure during the 2008-2009 financial crisis was 665,000.
As parts of the economy began to reopen over the summer, the unemployment rate in the US has come down to 8.7 per cent.
However, Congress is still locked in a dispute over a new package of emergency benefits to support unemployment, with its original $2 trillion economic stimulus needing bolstering.
A $600 weekly unemployment benefits supplement ended in July and was replaced with a $300 weekly subsidy, whose funding is already running out.
In recent days the attention of lawmakers has been grabbed by the battle to name a new Supreme Court justice after the death of Ruth Bader Ginsberg last weekend.
Richard Flynn, UK managing director at Charles Schwab, said that the level of weakness in the labour market remained “unprecedented”.
“This week’s rise in initial jobless claims will come as a surprise to the market, after last week’s promising data.
“Despite some encouraging numbers in recent weeks, the level of weakness remains unprecedented, and the labour market’s recovery will likely rely on further fiscal support from the government.”