New requests for US unemployment aid rose last week to almost 900,000, amid concerns that the labour market’s comeback has stalled as the White House and Democrats continue to clash over a new stimulus deal ahead of the presidential election.

Initial jobless claims increased by 53,000 to 898,000 on a seasonally adjusted basis, the US Department of Labor said on Thursday. Economists had expected 825,000 claims.

There were also 372,891 new unadjusted claims through the federal Pandemic Unemployment Assistance programme, which offers benefits to the self-employed and others who would not qualify for regular unemployment compensation. PUA applications were down from 463,897.

Steven Mnuchin, the US Treasury secretary, and Democratic House Speaker Nancy Pelosi spoke again on Wednesday to continue a lengthy negotiation over a package of new stimulus measures, including supplemental unemployment benefits.

The Trump administration and Democrats have made progress on some issues, Mr Mnuchin said, but he forecast it would be difficult to reach an agreement before the November election.

Congress approved $600 per week in extra jobless aid in March, around the same time weekly claims peaked at 6.9m. That benefit expired at the end of July. President Donald Trump signed an executive order to extend it at a lower level, although economists have estimated that funding for the programme would run out about five weeks from when each state applied to participate.

Federal Reserve chair Jay Powell and other central bank officials have cautioned that the US economy’s recovery would slow as the impact of stimulus provided early in the pandemic fades.

The US has recovered half of the 22m jobs lost at the height of coronavirus shutdowns in March and April. Employers hired 661,000 people in September, compared with bigger gains in each of the previous four months. The unemployment rate has dropped to 7.9 per cent, below a pandemic-era peak of 14.7 per cent.

The number of Americans actively collecting state jobless aid has slipped by 2.7m in three weeks. Continuing claims totalled 10m in the week that ended on October 3, which was down from 11.2m a week earlier. The insured unemployment rate, considered an alternative measure of joblessness, fell to 6.8 per cent from 7.7 per cent.

The jobless claims report also showed that 25.3m people were claiming benefits in all state and federal programmes as of September 26, down slightly from 25.5m, according to unadjusted figures that are reported on a two-week delay.

Last week’s national data included an estimate for California — the most populous US state — which had temporarily stopped accepting jobless claims to address fraud and to work through a backlog of applications.



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