By Peter Nurse
Investing.com – The number of Americans applying for initial unemployment benefits dropped to 1.314 million in the week ending July 3, the U.S. Labor Department said Thursday, a larger drop than expected but still underlining the view that the labor market faces a prolonged and difficult recovery from the Covid-19 pandemic.
The number was lower than forecasts for 1.375 million and down from 1.413 million in the prior week, a figure that was also revised lower.
This was received positively on Wall Street, with the benchmark S&P 500 futures contract turning just positive after early losses. At 8:50 AM ET (1250 GMT), the contract traded 6 points, or 0.2%, higher.
This marked the 16th straight week in which initial claims remained above 1 million, but the 14th week they have moved lower. Claims have pulled back from a record 6.86 million in late March, but the pace of decline has slowed.
The level of new layoffs continues to remain elevated, and the recent surge in Covid-19 infections has forced some states to roll back their reopening plans.
“Unfortunately we don’t expect to see meaningful declines from these huge numbers anytime soon,” said analysts at ING, in a research note. “High frequency data from Homebase suggest that employment gains are already plateauing as the spike in Covid-19 cases has led several states to announce renewed containment measures while other states delay their phased re-opening.”
Continuing claims, which show the number of people receiving benefits after an initial week of aid, came in slightly below expectations at 18.062 million in the week ended June 27, down just slightly from a revised 18.76 million a week earlier.
Continuing claims figures are reported with a one-week delay but are considered offering a better view of the labor market. Continuing claims initially eased from a record high of 24.91 million in early May but have ground lower since then.
U.S. Initial Jobless Claims Fall To 1.31M, Continuing Claims Just Above 18M
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