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US Unemployment Claims rise as the GDP is destroyed by COVID-19

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Miguel A. Rodriguez
Miguel A. Rodriguez
14 September 2020
The world's largest economy ravaged by the pandemic

It seems like for the past weeks, a pattern developed regarding the unemployment claims. The latest data release from the Department of Labor showed dark figures again.

If two weeks ago, the number of jobless people came in at 1.416 million, for the week ending July 25, this week’s figures came in at 1.434 million. It is the second time in almost four months when the unemployment claims rose. 

It marks the 19th consecutive week since the number exceeded one million. More than 53 million people became unemployed at a quarterly level, suggesting that the labor market is stagnant due to the constant increase in the number of COVID-19 infections. 

The $600 unemployment benefits will be over on July 31, but the opinions are divided on whether the benefits should continue until early next year. From the Senate Republicans and the White House's point of view, the extended benefits could deter people from returning to work and jeopardize the economic recovery.

Moreover, the Bureau of Economic Analysis announced that the American GDP contracted 32.9% in the second quarter. It exceeded both the worst quarter of the 2007-2009 recession when the GDP fell by 8.4% and the 1958 record of 10%.

The market reacted accordingly with USA30 closing lower by 0.9% and USA500 losing 0.4%.  

Read more about the US unemployment claims on CAPEX.com!

Sources: cnbc.com, forexfactory.com, edition.cnn.com


This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.