By Lucia Mutikani, Reuters — Washington, Thursday 18 June 2020
A second wave of layoffs amid weak demand and fractured supply chains is keeping new US applications for unemployment benefits elevated, supporting views that the economy faces a long and difficult recovery from the COVID-19 recession.
Initial claims for state unemployment benefits totaled a seasonally adjusted 1.508 million for the week ended 13 June, down from 1.566 million in the prior week. The 11th straight weekly drop pushed claims further away from a record 6.867 million in late March. Economists had forecast 1.3 million claims in the latest week.
Federal Reserve Chair Jerome Powell told lawmakers this week that “significant uncertainty remains about the timing and strength of the recovery.” The economy fell into recession in February. From manufacturing, retail, information technology and oil and gas production, companies have announced job cuts. State and local governments, whose budgets have been shattered by the COVID-19 fight, are also cutting jobs. “There are a lot of industries that are getting hurt and that’s starting to cascade down,” said one economist.