870,000 Americans filed for unemployment benefits last week, more than the 840,000 the market was expecting. The previous week’s total was revised up by 6,000.
This is further evidence to support the notion that momentum in the labor market has stalled, and it comes as Congress is still deadlocked on additional virus relief.
Fed speakers, including Jerome Powell, spent this week imploring lawmakers to deliver more fiscal stimulus. The claims figures, while well off the worst levels seen during the lockdowns, are still far above any historical precedent.
Meanwhile, continuing claims for the week ending September 12 were 12.6 million. That too is worse than estimates. Economists were looking for 12.3 million.
“Given COVID-19 is far from beaten plus the fact that the supportive impact from the fiscal stimulus is fading, caution remains warranted”, ING said, in a quick take, adding that “high frequency Homebase employment data suggests that jobs growth has stalled and with [virus] cases picking up again there are also worries about the reintroduction of new containment measures, similar to what we are now seeing again in Europe”.
While The White House still seems prepared to accept a compromise stimulus deal sporting a price tag of ~$1.5 trillion, some Senate Republicans are opposed to delivering any additional relief whatsoever.
On Wednesday, Larry Kudlow told reporters that another broad package isn’t necessary — that “targeted” relief would suffice. As a reminder, Kudlow is not an economist, contrary to popular belief and any job title he’s ever held. He’s also not to be taken seriously.
While Trump would doubtlessly be elated to send American voters another check with his signature on it prior to the election, anything with a price tag over $500 billion will be an uphill battle in the Senate.
And besides, the focus has now shifted away from helping everyday Americans — the only thing that matters on the Hill currently is how quickly the GOP can install Trump’s SCOTUS pick.
Somehow, we’re supposed to just accept that ~850,000 jobless claims is the new normal, and that there’s nothing we can do about it.
If ever there were a rationale for ousting elected representatives who refuse to countenance demand-side stimulus out of reverence for misguided notions about debt and deficits in advanced, currency-issuing economies, the state of the US labor market is that rationale.
Remember: your finances are not comparable to the US government’s finances. You can run out of money. The US government cannot.