U.S. jobless claims rose last week for the first time since March, the clearest sign yet of a pause in the economic recovery as coronavirus cases surge in much of the country and force businesses to close their doors once again. Initial claims through regular state programs increased to 1.42 million in the week ended July 18, up 109,000 from the prior week, a Labor Department report showed Thursday; on a non-seasonally adjusted basis, claims declined. There were 16.2 million who filed for ongoing benefits through those programs in the period ended July 11, down from the prior week and less than forecast.
U.S. stocks were mixed, while 10-year Treasury yields remained lower after the report. The jobless claims figures may reflect both renewed closings of businesses such as restaurants, as well as layoffs at other firms that have seen a sustained dropoff in revenue. Other challenges for the labor market include the imminent potential expiration of supplemental federal jobless benefits, and the widespread struggles of businesses that rely on in-person interaction, such as restaurants and airlines.
“Because of resurgence of the virus, a lot of firms that thought they were going to be opening up are instead not opening up,” said Robert Brusca, president of Fact & Opinion Economics. “While parts of the economy are still recovering, doing better, there are substantial parts, like in the service sector of the economy, that are really feeling the pain.”