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The Trump administration and the Congress have been drawing flak for not reaching a consensus on the new stimulus, which experts believe is crucial as far as economic recovery is concerned.
According to data published by the Bureau of Labor Statistics, a total of 1.2 million initial unemployment claims were filed during the week ended August 1. Economists were expecting a higher number. The four-week moving average of jobless claims eased to $1.4 million. A total of 655,707 persons availed pandemic assistance, which is relatively high despite a sequential decline.
The labor market has been going through one of the worst downturns since the onset of the coronavirus pandemic a few months ago, raising concerns that the economy is headed for a recession.
The improvement in claims shows that market conditions have improved since the number of applications surged to a record high of more than 6 million in April. Nevertheless, the deepening uncertainty over the pandemic calls for caution.
In the week ended July 25, the seasonally adjusted insured unemployment rate in the US economy dropped to 11%, or 16.1 million. .
Meanwhile, Wall Street’s reaction to the positive jobs data was not very encouraging. On Thursday, the market opened on a low note, after a short period of recovery when major indexes made steady gains.