WEEKLY US JOBLESS CLAIMS DIP; 32.9-M ON JOBLESS BENEFITS

The number of Americans filing for jobless benefits dropped to a near four-month low last week, but a record 32.9 million people were collecting unemployment checks in the third week of June, supporting expectations the labor market would take years to recover from the COVID-19 pandemic, Lucia Mukitani wrote for Reuters late on July 10, 2020.

Economists cautioned against reading too much into the bigger-than-expected decline in jobless claims reported by the Labor Department on Thursday, noting that the period included the July 4 Independence Day. Claims data are volatile around holidays.

Large parts of the country, including the densely populated states like Florida, Texas and California are struggling with record spikes of new coronavirus cases, which have forced authorities to scale back or pause reopening of businesses, and sending some workers home again. Bankruptcies are rising amid weak demand and businesses have exhausted government loans which have enabled them to keep workers on their payrolls.

“Don’t be fooled, the economy’s troubles aren’t over yet, not by a long shot,” said Chris Rupkey, chief economist at MUFG in New York. “For the labor market it is not the second wave that is holding jobs in suspension, it is the fears of the second wave and even a third wave that is holding the economy back and making the road to recovery an even longer one.”