US initial jobless claims hover above 1.4mn for straight 14th week; economy struggles

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US initial jobless claims hover above 1.4mn for straight 14th week; economy struggles

On Thursday, US initial jobless claims data released from the Labour Department had depicted a bleaker appearance for the US economy, as the number of American citizens filing for unemployment benefits for the first time in their lives fell slightly last week, while frets over a second wave of pandemic outbreak seemed to have kept a lid on hiring despite a reopening of the economy, pointing towards further struggles ahead for the US labour market which might even take years to reach a pre-pandemic level, suggested analysts.

On top of that, other economic data revealed on the day had bolstered beliefs that the US economy has been en route to register a contraction over the second quarter of the year at the steepest pace since the ages of Great Financial Depression of 2007-2009, however, orders for key capital goods had rebounded last month, but trade deficits had widened sharply amid a sweeping disruption in supply chains across the globe.

Besides, according to the initial jobless claims data released by the US Labour Department on Thursday, the number of applications for initial unemployment benefits fell by 60,000 to a seasonally adjusted 1.48 million for the week that ended on June the 20th, while there had been a surge in unemployment benefit claims in the US states of California, Texas and Florida, all of which have been witnessing an uptick in pandemic cases over the recent past.

"All is not well" in this US economy

Meanwhile, referring to a struggling US labour market where businesses remained reluctant to re-hiring amid uncertainties over a re-emergence of pandemic cases, a Chief Economist at MUFG in New York, Chris Rupkey said following reveal of Thursday’s US initial jobless claims data, “While it counts as good news that businesses are ordering more equipment in May as the states reopened, the second wave of the pandemic may keep companies cautious in the months ahead when it comes to making new investments in the country’s future.