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New jobless claims rose last week, another sign that the labor market recovery is cooling off amid the ongoing disruption from the coronavirus pandemic. The weekly initial jobless claims rose 135,000 for the week ending August 15 to a seasonally adjusted 1.1 million. The number of new filings shows that there are new layoffs, even as the economy by and large shows signs of recovery from the profound economic downturn, Eric Morath reports on the pandemic and shutdowns aimed at containing it.
The report followed other government and private companies, showing that employment growth slowed in July versus JuneJob postings have fallen this week for the first time since April, and several companies are planning more layoffs. However, the data show that the labor market is improving, albeit more slowly than in spring. The number of people receiving unemployment benefits under regular government programs that cover most workers has fallen to its lowest level since April. At the national level, hiring is more than just a compensation for downsizing.
WHAT YOU NEED TO WATCH TODAY
IHS Markits The August preliminary manufacturing index is expected to increase from 50.9 to 51.5 at the end of July and the services index is expected to increase from 50.0 to 51.0. (9:45 ET)
US existing home sales an annual pace of 5.39 million is expected for July compared to 4.72 million in the previous month. (10 a.m. ET)
The European Commission The consumer confidence flash indicator for August was released at 10 a.m. CET.
Hughes the Baker The number of drilling rigs expired at 1:00 p.m. (CET).
Live questions and answers: Atlanta Fed President Raphael Bostic meets with WSJ chief correspondent Nick Timiraos to discuss the economic outlook and the central bank’s response to the shock of the coronavirus pandemic on September 3rd. Submit your questions today.
What would you do with $ 600?
Americans on unemployment insurance lost a $ 600 per week allowance when that federally funded benefit expired in late July. At the national level, credit card and other consumer data suggest that losses did not affect overall spending. But it seems to have had an acute impact on the individual. Facteus, a financial data company that tracks debit and credit card spending, examined transactions between prepaid debit cards – a common way for states to distribute unemployment benefits and some employers for the distribution of wages. Average unemployment benefits fell sharply from August to around $ 430 per week from around $ 700. This led to a significant shift in spending. For example, by the end of July, department store transactions for unemployment cards and payroll cards had been roughly the same.
Fast food spending tells a similar story.
When will the unemployed receive additional benefits of $ 300 per week? President Trump signed an executive order on Aug. 8 offering $ 300 a week in government-funded unemployment benefits for workers laid off during the coronavirus pandemic. He also urged participating states to provide an additional $ 100 per week for each recipient. Sarah Chaney and Gwynn Guilford from the WSJ explain what we know about the program.
UK private sector output grew the fastest in nearly seven years, the eurozone economy lost momentum, and activity in Japan continued to decline in August. While the polls among purchasing managers showed mixed wealth in major economiesThere were common themes: uncertain prospects and more job losses. “Private sector companies reported another sharp drop in employment as scars from the pandemic and ongoing doubts about the sustainability of the recovery led to a need to cut overheads,” said IHS Markit economist Tim Moore of the latest UK survey.
US indices are underway at 9:45 a.m. ET.
A story of two economies
For many it is Stock market and economy appear increasingly disconnected. Part of the reason for the gap: The percentage of Americans who own stocks, either directly or through retirement or mutual funds, is falling, and stock ownership is increasingly concentrated in a segment of the population. According to the Federal Reserve, the top 10% of Americans by wealth owned 87% of all stocks outstanding in the first quarter. This share has grown in the last ten years from 82.4% in 2009. The stock market has risen sharply during this period, and the S&P 500 has more than quadrupled from its low during the financial crisis in March 2009, reports Paul Vigna.
The Oil market is again under pressure from the twin forces of increasing supply and stalling demand. Brent crude oil futures, the benchmark in international energy markets, fell 1% to $ 44.94 a barrel on Thursday after a group of large manufacturers said the recovery in demand from the Covid-19 shock was unexpectedly slow reports Joe Wallace.
India aspiring middle class Consumers had already stalled before the coronavirus hit. The pandemic pretty much turned them off. Economic activity in India has been slow to recover from one of the tightest lockdowns in the world. Now there are growing concerns that the economy will come under pressure in the coming years as consumer spending on staple foods from McDonald’s to shampoo has plummeted, reports Eric Bellman.
WHAT WE’LL READ
Parents and their children are hit hard by Covid-19. “We find evidence of disproportionate hardship: households with children are more likely to suffer job and income losses, leading to greater savings needs, higher rates of missed rent and debt payments, and inadequate nutrition. We also observe a greater dependence on external people Support, including unemployment benefits, food stamps (SNAP) aid, and financial aid and food donations from friends, family and food banks, “New York Fed economists write Liberty Street Economics.
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