The number of Americans making a new claim for unemployment insurance unexpectedly rose last week as the economic recovery stuttered, posing a problem for Donald Trump with just weeks until the presidential election.
New US jobless claims came in at 898,000 in the week that ended on 9 October, the Department of Labor said today.
That was up from 845,000 a week earlier. And it was well above economists’ expectations of a fall to 825,000.
The figures are the latest sign that the US’s economic recovery is stalling as the winter approaches.
After a record second-quarter contraction of close to 10 per cent, the economy recovered relatively strongly as states lifted lockdown measures. Unemployment, which hit 14.7 per cent in April, fell to 8.4 per cent in August.
However, various pieces of data – from surveys to payroll numbers – have shown that the rebound is slowing down.
Jobless claims will worry Trump administration
Republicans, Democrats and the White House remain at loggerheads over the next stimulus injection. Economists say it is sorely needed as businesses and households approach an uncertain winter.
The latest figures were not all bad, however. The number of people continuing to claim unemployment insurance fell by 1.17m to 10.02m in the week ending 3 October, the Labor Department said.
Nonetheless, the economic slowdown is a problem for President Trump, who is lagging behind his Democrat rival Joe Biden considerably as the 3 November election approaches.
Trump had hoped to campaign on a strong economy, before it was shot to pieces by coronavirus. Now, any plans to campaign on the recovery are also in trouble.
Naeem Aslam, chief market analyst at Avatrade, said the rise in jobless claims is “a warning sign for the US lawmakers to get their act together”.
“The sad fact is that this situation is only going to get worse if we do not get any help in terms of another stimulus package.”
He said the figures, combined with new Covid restrictions around the world, would likely be bad for markets. “It is very likely that bears will rule the price action today.”