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

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

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


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