Jobless claims decline but millions still out of work
Video Credit: Reuters - Politics - Duration: 01:44s - Published
Jobless claims decline but millions still out of work
Layoffs in the United States are abating, but millions who lost their jobs because of COVID-19 continue to draw unemployment benefits, suggesting the labor market could take years to heal from the pandemic even as businesses resume hiring workers.
The latest data on U.S. jobless claims shows both a continued drop in those seeking benefits, and an historically high number of people out of work.
New claims fell to 1.5 million… that's the 10th straight weekly decline, according to government data released Thursday.
But that figure is still more than twice as high as the number of Americans who sought benefits at the peak of the great recession And in another sobering gut check, those relying on jobless benefits beyond the first week, known as continuing claims, still hovers around an eye-popping 21 million.
Thursday's data served as a reminder of the long-road to recovery that lies ahead for the U.S. economy, despite a solid bounce-back in hiring last month.
"The May employment report, of course, was a welcome surprise, very pleased.
We hope we get many more like it.
But I think we have to be honest that it's a long road, depending on how you count it, well more than 20 million people displaced in the labor market.
It's going to take some time.
And we are going to be deploying our tools, all of our tools to their full extent in pursuit of those goals, however long it takes." The Fed's grim outlook was cited as one of the reasons the stock market is trading sharply lower on Thursday.
Investors were also un-nerved by new signs that a second-wave of the health crisis is emerging in states that were early to re-open.
And that is sparking fear the layoffs aren't over.
Spirit Aerosystems, the top supplier to aerospace giant Boeing, announced that it will be temporarily laying off workers beginning next week.
Boeing is winding down production of the 747 jumbo jet, which democratized global air travel in the 1970s but fell behind modern twin-engine aircraft. Megan Revell walks through the iconic jet’s history.
British Airways, the world's largest operator of Boeing 747s, will retire its entire jumbo jet fleet with immediate effect after the novel coronavirus pandemic sent air travel into freefall. Francis Maguire reports.
Boeing Co and suppliers set the final number of parts it would need for the 747 jumbo jet program at least a year ago, signaling the end for a plane that democratized global air travel in the 1970s. Francis Maguire reports.
Federal Reserve Chairman Jerome Powell on Wednesday repeated his pledge to use a "full range of tools" to support the U.S. economy and keep interest rates near zero for as long as it takes to recover from the fallout from the coronavirus outbreak, saying the economic path will depend significantly on the course of the virus.
A full U.S. economic recovery will not occur until the American people are sure that the novel coronavirus epidemic has been brought under control, Federal Reserve Chairman Jerome Powell told Congress on Tuesday. Conway G. Gittens has more of his testimony.
The US Federal Reserve is expected to remain apolitical and stay out of the business of Congress. Even so, President Donald Trump has repeatedly jeered at Fed Chair Jerome Powell, even going so far as to call him 'an enemy of the state.' Nevertheless, Business Powell stuck his neck out in a Congressional hearing this week, calling for more government intervention in the economy.
Federal Reserve Chair Jerome Powell on Tuesday testified before the Senate Banking Committee and said that the U.S. economy appears to be entering the second phase of reopening assuming the virus remains under control.
Equity benchmark indices swung nearly 1 per cent lower during the afternoon session on July 30 ahead of the expiry day of monthly futures and options contracts. At the closing bell, the BSE S and P Sensex was down by 335 points or 0.88 per cent at 37,736 while the Nifty 50 lost 101 points or 0.9 per cent at 11,102. Most sectoral indices at the National Stock Exchange were in the red except for Nifty pharma which gained by 3.1 per cent and IT which crawled up by 0.6 per cent. Nifty bank slipped by 2 per cent, financial service by 1.8 per cent and metal by 1.2 per cent. Among stocks, energy majors were big losers with Bharat Petroleum Corporation down by 8 per cent to Rs 417.80 per share. IndianOil Corporation dipped by 4.1 per cent, ONGC by 2.4 per cent and Power Grid Corporation by 2.3 per cent. Banking scrips too witnessed losses with IndusInd Bank dipping by 5.4 per cent, Axis Bank by 3.4 per cent and State Bank of India by 2.4 per cent while home loan lender lost by 3.6 per cent. Pharma stocks, however, witnessed handsome gains with Dr Reddy's advancing by 4.6 per cent to close at Rs 4,500 per share. Sun Pharma and Cipla were up by 3.7 per cent and 0.8 per cent respectively. Wipro, Infosys, Vedanta, Maruti Suzuki, Britannia and Reliance Industries too traded with a positive bias. Meanwhile, Asian stocks were flat as the US Federal Reserve members voted to leave the target range for short-term rates between 0 and 0.25 per cent to support the country's virus-battered economy. Japan's Nikkei and Hong Kong's Hang Seng were down by 0.26 per cent and 0.69 per cent but South Korea's Kospi moved up by 0.17 per cent.
US Senator Dick Durbin is requesting the Fed probe card networks and issuers, such as Mastercard and Visa. The senator wants an investigation over potentially anticompetitive fees. Durbin's letter hi-lighted that merchants are paying excessive debit card fees during the pandemic. The companies have planned major fee changes for US-based merchants. The Feds are requesting a competition-based investigating into Visa, Mastercard, and major issuers.
Spartan Capital Securities' Peter Cardillo expects the Fed to say it'll do "whatever it takes" to keep adding liquidity to the markets when policymakers meet this week. But he also tells Reuters' Fred Katayama that he thinks there's a good chance the markets will pull back, regardless of the Fed, because "the economy is faltering."
Investors on Tuesday paused ahead of a Federal Reserve Meeting that could reveal the Fed's view on recent signs of economic recovery. No major policy announcements are expected when the US central bank's meeting wraps up on Wednesday. However, investors will scrutinize its remarks on the health of the economy, which has been reopening slowly after coronavirus-related closures. According to Reuters, the S&P 1500 airlines index declined 8.5% on Tuesday.
The number of jobless Americans is down from last week with 1.5 million filing for unemployment. More than 44 million Americans have filed for unemployment benefits since the start of the coronavirus..