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US initial jobless claims higher than forecast

Figure has been more than expected for second straight week, adding to signs recovery is cooling


THE number of Americans seeking unemployment benefits was higher than forecast for a second straight week, adding to signs that the recovery is cooling amid a pickup in coronavirus cases.

Initial jobless claims in regular state programmes fell to 1.48 million last week from an upwardly revised 1.54 million in the prior week, Labor Department data showed on Thursday. Continuing claims, a closely watched figure that tracks the overall pool of recipients, declined by more than forecast to 19.5 million in the week ended June 13.

Economists surveyed by Bloomberg News had forecast Thursday's report to show 1.32 million initial claims and 20 million continuing claims.

US stocks opened lower, while Treasuries and the US dollar were higher on the day. A separate report on Thursday showed orders for durable goods and business equipment jumped in May by more than forecast.

The unemployment-claims figures underscore the risks to the recovery from deep labour-market damage across the country. While states have largely eased restrictions on businesses and some consumer demand has returned to support those jobs, virus cases have been resurgent in many large states and consumer spending remains subdued compared with pre-pandemic levels.

Some of the job losses are emerging from the largest US companies as they adjust to an economy and consumers re-shaped by the pandemic. Macy has announced that it will cut about 3,900 corporate and management jobs to slash costs.

"Even though you're obviously getting a lot of people re-hired, the people being laid off is eating into that quite a bit," said Joshua Shapiro, chief US economist at Maria Fiorini Ramirez. "What you're seeing is a second leg of layoffs. Now it's not just the service sector being shut down. Now it's businesses saying, 'Well, I don't need all these people'."

Even so, economists generally expect continued improvement in the hard-hit labour market; the government's monthly jobs report next week is projected to show employers adding three million workers to payrolls in June, following 2.5 million in May.

Commerce Department figures on Thursday showed US orders for durable goods jumped 15.8 per cent in May, the most in nearly six years as nationwide re-openings rekindled demand for a broad range of merchandise and equipment.

At the same time, another report showed US merchandise exports sank in May to the lowest in more than a decade, while imports dropped. BLOOMBERG

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