Weekly unemployment claims rise to 1.4 mn in US

The government reported Thursday that more than 1.4 million workers filed new claims for state unemployment benefits last week, the first time that the weekly tally has risen in more than three months.

The upturn, from about 1.3 million in the two preceding weeks, comes just days before an extra $600-a-week jobless benefit is set to expire.

An additional 975,000 claims were filed last week by freelancers, part-time workers and others who do not qualify for regular state jobless aid but are eligible for benefits under an emergency federal program, the Labor Department said. Unlike the state figures, that number is not seasonally adjusted.

The report Thursday has particular resonance: It reflects the week that will be used by the department to calculate the June jobs data and unemployment rate.

The stubbornly high rate of new weekly claims more than four months into the coronavirus pandemic “suggests that the nature of the downturn has changed from early on,” said Ernie Tedeschi, a policy economist at Evercore ISI. It may mean that businesses are shutting down again as cases surge in some places, or that funds from emergency federal loans through the Paycheck Protection Program are running out, he said — or worse, something more fundamental.

“It might be that businesses are running through their first line of credit,” he said, “and now they’re facing the music of an economy that has recovered a little bit but nearly enough.”

Rubeela Farooqi, the chief U.S. economist at High-Frequency Economics, warned that unemployment could rise in the coming months. “Now the risk is coming from temporary job losses that could become permanent,” she said.