US weekly jobless claims unexpectedly rise as labour market takes step back

The number of Americans filing for unemployment benefits unexpectedly rose last week for the first time in nearly four months, suggesting the labour market was stalling amid a resurgence in new Covid-19 cases and depressed demand.

The weekly jobless claims report from the US Labor Department on Thursday, the most timely data on the economy's health, also showed nearly 32 million people were collecting unemployment checks in the first week of July. Relentless labour market weakness puts pressure on the US Congress to extend a $600-weekly jobless benefit supplement, which expires on July 31.

Initial claims for state unemployment benefits increased 109,000 to a seasonally adjusted 1.416 million for the week ended July 18. 

That was the first weekly rise in applications since the week ending March 28, when claims raced to a record 6.867 million as non-essential businesses such as restaurants and gyms were shuttered to slow the spread of the coronavirus.

"There is no gradual and uneven recovery for the labor market," said Chris Rupkey, chief economist at MUFG in New York.