US jobless claims increase to 7,42,00 as COVID-19 pandemic worsens

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Washington: The number of Americans seeking unemployment aid rose last week to 7,42,000. This is the first increase in five weeks and a sign that the resurgent COVID-19 viral outbreak is slowing the economy again. The second wave of COVID-19 outbreak is forcing more companies to cut jobs.

The Labour Department’s report Thursday showed that applications for benefits rose from 7,11,000 in the previous week. Claims had soared to 6.9 million in March when the pandemic first intensified. Before the pandemic, applications typically hovered about 2,25,000 a week.

The economy’s modest recovery is increasingly at risk. The newly confirmed daily infections in the United States have exploded 80% over the past two weeks to the highest levels on record.

More states and cities are issuing mask mandates and limiting the size of gatherings. Also the administration is restricting restaurant dining, closing gyms or reducing the hours and capacity of bars, stores and other businesses. At least 15 states have tightened curbs on businesses to try to slow infections.

Evidence is emerging that consumers are losing confidence in the economic outlook. They are pulling back on shopping, eating out and other activities. Spending on 30 million credit and debit cards tracked by JPMorgan Chase fell 7.4% earlier this month compared with a year ago.

That marked a sharp drop from two weeks earlier. Consumer sentiment also declined in early November and is down nearly 21% from a year ago, according to a University of Michigan survey.

The number of people who are continuing to receive traditional unemployment benefits fell to 6.4 million, the US government said, from 6.8 million. That shows that more Americans are finding jobs and no longer receiving unemployment aid.

But it also indicates that many jobless people have used up their state unemployment aid — which typically expires after six months — and have transitioned to a federal extended benefits programme that lasts 13 more weeks.