U.S. unemployment surpasses 47 MILLION _ U.S. consumer spending rebounds, falling income

• 2020-06-28
• Traiding Idea

U.S. unemployment during coronavirus crisis surpasses 47 MILLION

Another 1.48 million Americans applied for unemployment benefits last week, the Department of Labor said. Economists had expected a 1.3 million increase in initial filings as the coronavirus cases in the United States increased. As a result, the total number of claims since mid-March is 47.3 million.

Continued regular jobless claims mean that people who have applied for unemployment benefits for at least two consecutive weeks now reach 19.5 million, less than 20.3 million in the previous week.

"Initial jobless claims continue to moderate only gradually. While the labor market remains exceptionally weak, signs of gradual improvement suggest another month of NFP [non-farm payroll] gains during June", said Lewis Alexander, an economist at Nomura Financial Services.

In the week ending June 20, California had the highest unemployment rate, at 287,000, up from 241,000  the previous week.

Georgia has 124,000 applications for unemployment benefits, down from 132,000 in the previous week. Florida reported 93,000, New York 90,000 and Texas reported 89,000 filings.

The United States has seen a record spike in Covid-19 numbers in recent weeks, with more than 48,000 new cases reported on Wednesday. More than 2.4 million people in the United States have been infected with the Covid-19 so far, and more than 124,000 have died.

U.S. consumer spending rebounds, falling income

Consumer spending in the United States rose the most in May, but this trend does not appear to be continuing as income declines, and millions of people will not receive unemployment benefits from next month.

The jump in coronavirus cases threatens the trend of increasing consumer spending in the United States, which was announced by the U.S. Commerce Department on Friday. Most of the new cases have been reported in California, Texas and Florida.

The increase in Covid-19 infection has affected consumer sentiment in the second half of June. Confidence in the government's economic policies has been at an all-time low since Donald Trump took office.

After the tough measures taken to stop the spread of the coronavirus, which caused the recession in February, the U.S. economy is now showing signs of recovery.

Hiring, construction permits, industrial production and ordering of factory goods increased in May.  But economists say there are still many barriers to the economy.

The Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 8.2 % last month. Consumer spending fell 12.6 % in April.

Economists predict that consumer spending will rise 9 % in May as a result of the reopening of many businesses.

But personal income fell 4.2 % in May, the biggest drop since January 2013. Personal income rose 10.8 % in April after receiving $ 1,200 checks from the government and rising unemployment benefits to protect the economy against the Covid-19 hardship. The payment was part of the government's $ 3 trillion fiscal package.

From July 31, the U.S. government will stop paying $ 600 per week in unemployment benefits. Economists estimate that 26 million people will lose their income.

Economists expect US GDP to fall 46 % in the second quarter of this year. The U.S. economy shrank by 5%  in the January-March quarter, the deepest recession since the Great Depression of 2007-2009.