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US weekly jobless claims at record 6.6 million, amid virus shutdown

US weekly new jobless claims clocked in at a record 6.648 million, breaking an unemployment record for the second week in a row, as the fallout from the coronavirus pandemic weighs on the economy.

Washington, 2 April 2020 (dpa/MIA) – US weekly new jobless claims clocked in at a record 6.648 million, breaking an unemployment record for the second week in a row, as the fallout from the coronavirus pandemic weighs on the economy.

The number people filing for unemployment the previous week were also revised slightly upwards and now stands at more than 3.3 million, as sectors of the economy have been shut down to help prevent the spread of the new virus.

The weekly data from the Department of Labor came in above analysts’ expectations and throws further doubt on the prospect of a quick economic recovery.

Stock markets in the US moved sideways on the announcement, coming off sharp declines on Wednesday. The S&P 500 was up about 0.45 per cent in the first minutes of trading before tipping slightly into the red. Yields on the benchmark 10-year Treasury bond slid lower.

With more than 10 million people having filed for unemployment insurance in the last two weeks of March, the real US unemployment rate may reach double digits according to analysts, including at Bank of America, up from historic lows before the virus outbreak hit.

Data coming out Friday on the March unemployment rate is not expected to reflect the full extent of losses due to the way it is calculated and the fact that most losses came in the second half of the month. The weekly data gives a more real-time understanding of the market.

Most citizens are now living under forms of calls to stay-at-home, with 37 states enacting such orders, affecting some 250 million people.

Florida, long a hold-out, saw its Republican governor relent this week and issue stay-at-home orders, albeit with a large number of exceptions, as cases in the third-largest state-by-population mounted. This will only add to national job losses.

The new jobless claims came after Congress passed a massive 2.2-trillion-dollar aid package, meant to act as stimulus for the economy, which includes improved unemployment insurance.

Within weeks, the Treasury is also expected to give households direct cash infusions, meant to help cushion the blow from the sharp economic freeze.

Democrats are pushing for a fourth stimulus package, while key members of President Donald Trump’s Republican Party in Congress are balking at the prospect of more spending, particularly on social safety nets.

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