As Covid-19 cases rise in US, jobless claims follow - RTHK
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As Covid-19 cases rise in US, jobless claims follow

2020-11-19 HKT 23:49
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  • Analysts fear the latest increase is just the beginning. File photo: Reuters
    Analysts fear the latest increase is just the beginning. File photo: Reuters
The United States saw a sharp increase in new filings for jobless benefits last week, a sign that the unemployment crisis could be intensifying again as the world's largest economy suffers a surge in Covid-19 infections.

The worrying increase comes as lawmakers in Washington remain at an impasse on enacting another stimulus spending measure, meaning the extra payments to the unemployed and loans and grants to small businesses that helped the economy through the early months of the pandemic are yet to return.

The US Labour Department on Thursday reported a seasonally adjusted 742,000 new claims for unemployment benefits filed in the week ended November 14, and 320,237 claims, not seasonally adjusted, made separately under a programme for workers not normally eligible for jobless aid.

The worse-than-expected data marked the 35th straight week that new jobless claim applications have remained above the worst single week of the 2008-2010 global financial crisis, and analysts fear the latest increase is just the beginning.

"Given the trajectory of the pandemic, we may be stuck in the one million a week range of Americans claiming benefits (both state and federal) for some time, and we'll be lucky if that level doesn't rise by 100,000 to 200,000 additional claims per week," Robert Frick of Navy Federal Credit Union said in a note.

The US is home to the world's largest outbreak of Covid-19, which has accelerated in recent weeks.

The country saw 157,950 new infections over the 24 hours prior to Wednesday, the same day total deaths from the disease climbed above 250,000.

There's evidence that employers are already feeling the pain from the rise in cases.

United Airlines on Thursday said it was seeing more travellers cancel plans and new bookings decline, projecting total capacity in the fourth quarter to decrease "at least" 55 percent compared with a year ago.

Air carriers at large have struggled, with wary travellers canceling plans, and United said in a securities filing it "continues to see a significant impact in demand for air travel."

"The company does not currently expect the recovery from Covid-19 to follow a linear path," it said.

Carriers were also counting on Congress to enact more stimulus after provisions of the US$2.2 trillion Cares Act passed in March supporting the unemployed, small businesses and keeping airline workers on payrolls expired in recent months, leading United and American Airlines to lay off 32,000 workers.

But Democrats and Republicans in Washington have been unable to agree on how much to spend and have shown no sign of doing so before President Donald Trump leaves office in January.

"The absence of federal benefit subsidies and (small and medium enterprise) support threatens a resumed collapse in demand and a spiralling economic retreat in the months ahead," investment banker Dan Alpert said on Twitter.

"Protecting the economy is critical but so, too, is offering humanity to households entering this holiday season in despair." (AFP)