USA, Never So Few Unemployed Since the Beginning of COVID (But Over a Million Remain)

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Good news from the employment front in the United States: with 1.18 million initial jobless claims in the past week, the Labor Department was able to announce the lowest since the start of the Covid-19 pandemic.

This is a number well below the expectations of Wall Street analysts, who expected at least 1.41 million : a decrease of 249 thousand units compared to the previous figure, revised upwards to 1.44 million.

Continuous requests are also down , i.e. the number of US citizens who continue to receive unemployment benefits even after the first week, which fall to 16.1 million (a decrease of 844,000 units) and the four-week average , 16, 6 million, down by over 413 thousand units.

What will happen to the anti-pandemic funds?

Today’s data, which count the requests received by the Labor Department until July 31, therefore also including the latest additional subsidies provided for by the Congressional law on Economic Security, Aid and Aid in the face of the coronavirus emergency, which also included a series of grants (under the Pandemic Unemployment Assistance program ) of $ 600 per week per family.

However, the program expired at the end of July and since then the Republican and Democratic deputies have been competing within the US Congress to find the right balance and be able to extend it (the bone of contention is above all the amount of subsidies: for the dems it should remain unchanged, Republicans are pushing for a reduction).

The situation remains even more heated by pressure from the Federal Reserve , which two weeks ago announced the continuation of massive asset purchases to keep the US economy afloat, while urging lawmakers to implement fiscal measures (including aid to families) capable of restoring new impetus to consumption. The White House has threatened that if a draft is not finalized by the end of the week, it could act through executive orders.

On the other hand, an alternative reading that has already been circulating for weeks expects that, at the end of the supplements, even the initial requests for unemployment would drop again drastically: the $ 600 in addition to the unemployment benefit could in fact have been a deterrent for research of a new job, according to some analysts.

What is expected for tomorrow’s non-farm payrolls?

Last week’s improvement, however, will not be counted in the July New Payroll Survey , which is released tomorrow, as the Department of Labor Statistics data stops in the previous week.

Meanwhile, yesterday’s Automatic Data Processing report , an indicator of the trend in the employment situation in the private sector, estimated a drop in new payrolls of 167,000 units , a sharp drop compared to the forecast of 1.5 million.

For non-farm payrolls, the forecasts foresee 1.6 million more jobs in July, while the unemployment rate could drop to 10.5%: a record number, however, but for the chin it would return to already known territories ( in December 1982 unemployment reached 10.8%).

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How did the markets react?

However, the situation is still critical, with requests exceeding one million units for the twentieth consecutive week. At the opening, the Wall Street indices struggled to stay above par, although they are now all positive: the Dow Jones is up 0.23%, at 27,268 points, the Nasdaq by 0.17% and the S&P 500 gains. 0.13%.

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