US labor market recovery slowing; economists urge more fiscal stimulus

WASHINGTON: The number of Americans filing new claims for unemployment benefits hovered around 1 million last week, suggesting the labor market recovery was stalling as the COVID-19 pandemic drags on and financial aid from the government dries up.

Initial claims for state unemployment benefits fell 98,000 to a seasonally adjusted 1.006 million for the week ended Aug. 22, the Labor Department said. Economists polled by Reuters had forecast 1.0 million applications in the latest week. Stocks on Wall Street rose as investors cheered the Fed's new focus. The dollar gained versus a basket of currencies. U.S. Treasury prices fell.Americans in low-wage occupations have borne the brunt of the recession, which started in February. A government-funded program offering businesses loans to help with wages has lapsed and a US$600 weekly unemployment supplement expired on July 31.

Though continuing claims declined between the July and August survey periods, economists expect the unemployment rate remained above 10per cent this month. Part of the decrease in continuing claims was likely because of people exhausting eligibility for benefits. Graphic: Consumer spending contribution to U.S. GDP https://graphics.reuters.com/USA-STOCKS/gjnpwaawopw/gdp.png

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