US initial jobless claims climb to 2-month peak; labour market weakness persists

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US initial jobless claims climb to 2-month peak; labour market weakness persists

In the latest vindication of a vivid illustration that the US labour market has been far from out of the woods, US Labour Department data had unveiled on Thursday that the number of Americans filing for first-time state unemployment benefits had leapt to a two-month peak last week, as the world’s largest economy might be on the brink of another wave of pandemic outbreak.

Nonetheless, a likely insurgence in delta variants would more likely to be less pernicious given the acceleration in vaccination push with more than 210 million Americans having been fully inoculated thus far, roughly a third of the nation’s entire population, said the analysts.

However, despite a sharp uptick in first-time weekly claims, the Labour Department data had also revealed more Americans had been floating back to work as a number of Republican-led US States had scrapped the ‘Biden Administration’-proposed $300 per week in additional unemployment benefits.

US weekly initial jobless claims rise sharply as labour market scuffles

According to the US Labour Department’s weekly jobless claim data, the number of Americans filing for initial jobless claims rose 51,000 to a seasonally adjusted 419,000 during the week that ended on July 17, a level never witnessed since mid-May, while first-time state unemployment claims soared in the US State of Kentucky, Michigan, Missouri alongside Texas.

However, continuing claims dropped in many states despite a rise in delta variant cases, as analysts were not expecting a renewal of restrictions as stiffer as it had been last year. Nonetheless, addressing to an increase in delta variant cases that appeared to be troubling a gradual recovery in the labour market, a chief economist at FWDBONDS in New York, Christopher Rupkey said, “The rise in jobless claims this week tells us that the labor market's troubles are not completely behind us and the Delta variant may yet throw a monkey wrench into the economic recovery from the shortest recession in American history.