Despite the surge in new coronavirus cases and government-imposed temporary closures of businesses, the previous week’s jobs report excited investors and continued on the rally from the last quarter into the holiday weekend. Americans are looking forward to getting back to work, but, unfortunately, many are still submitting new unemployment claims. Some have speculated government benefits are providing too much financial support, disincentivizing people from returning to work. Others have lost their employment permanently.
The number of Americans filing first-time unemployment benefits continued to slow last week, but remained above the consensus expectation. Initial claims for unemployment benefits fell by 55,000 to 1.427 million, which was the 13th consecutive decline, as labor market conditions continued to improve with the reopening of the economy. Continuing claims for unemployment benefits, which counts the number of Americans already receiving benefits, rose by 59,000 to 19.290 million.
While claims filed prior to the pandemic averaged around 225,000 per week, more than 50 million new claims have been filed since mid-March. The Bureau of Labor Statistics reported another 4.8 million Americans went back to work in June sending the unemployment rate down to 11.1%,. As millions of people have returned to work since the states began to reopen in May, the increase in new jobs exceeded economists’ forecasts of 3.7 million. However, the survey used to compile the report took place before the latest wave of new coronavirus cases erupted.
The U.S. lost more than 22 million jobs during the height of the pandemic and has restored about 7.5 million of them in the past two months. Analysts were quick to caution against expecting these substantial numbers to continue. Sal Guatieri, Senior Economist at BMO Capital Markets, wrote in a note to clients, “the end of the lockdowns has allowed for a faster than expected recovery in jobs in the past two months, but more recent events and data suggest much tougher slogging ahead.”
Whether you are an essential employee, waiting to go back to work, or lost your job permanently, the coronavirus pandemic has affected all of us. If you are curious whether or not your financial future has been altered by the pandemic, please do not hesitate to contact a member of our team. We would be happy to build you a financial analysis that includes all the changes you are facing.
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