U.S. Unemployment Claims Held Steady at 860,000 Last Week

The number of Americans filing for new unemployment benefits fell last week but remains stuck at extremely high levels as the labor market recovery slows and consumer spending slows down as the fiscal stimulus fades.

The US Labor Department said that the total number of new applications for unemployment benefits, adjusted in light of seasonal factors, amounted to 860,000 for the week ending September 12, compared with 893,000 in the previous week. Economists polled by Reuters had forecast 850,000 orders in the latest week. And the number of requests is more than four times its level at the beginning of the year.

Yesterday, Wednesday, the US Federal Reserve kept interest rates near zero, noting that the pandemic “will continue to pressure economic activities, employment and inflation in the short term and pose great risks to the economic outlook in the medium term.”

Council Chairman Jerome Powell said that more financial support is likely to be needed, adding that although the labor market has improved “dramatically”, “it is very far from the employment cap.”

Data this week showed retail sales slowed in August, which economists attributed to a lower extension of unemployment benefits to millions of Americans. Factory production slowed last month.

And after it fell from a record level of 6.867 million at the end of March with the resumption of activities to work after they were closed to curb the spread of the Coronavirus, unemployment claims are witnessing stability with the extension of layoffs to sectors that were not initially affected by the mandatory closure.