US new jobless claims back above 1 million

Continuing claims, or those receiving unemployment for two weeks or more, fell by 646,000 to 14.88 million for the week ended Aug 8, government statistics showed.

Still, about 14.8 million workers received unemployment benefits for the week ended Aug 8 — more than double the 6.6 million during the recession of 2008–09.

"Claims are still down 325,000 from the last full week of July," economists at Jefferies Financial Group said in a research note. "The next few weeks will be telling in terms of how much of the recent improvement has been fundamental as the Sun Belt has recovered from their COVID surge, or technical as the $600 benefit has expired."

But there may be trouble ahead.

"The US Congress will likely approve additional relief measures for unemployed workers in the coming weeks after earlier benefits expired," said Moody's Investor Service in a report. "But the delay will weaken the purchasing power of some US households and hurt their ability to meet financial obligations."

Consumer spending represents about 66 percent of the US economy.

Discount retailer Target this week reported its strongest quarterly growth in company history.

The Minneapolis-based company said online sales increased 195 percent in the second quarter compared with the same period a year ago.

Walmart, the nation's largest retailer, also reported strong sales during the coronavirus pandemic as many shoppers ordered online and picked up their purchases in store parking lots to maintain social distancing.

Home-improvement retailer Lowe's reported strong sales.

On the flip side, Kohl's and T.J. Maxx, which temporarily shut down during the coronavirus outbreak, reported sharp declines.

Other US retail chains, including J.C. Penney, J. Crew, Neiman Marcus, Brooks Brothers, Men's Wearhouse, Jos. A. Bank, Ann Taylor and Canada's Moores Clothing for Men, filed for bankruptcy during the pandemic.

Congress is likely to approve additional measures to help unemployed workers after the July 31 expiration of an additional $600 jobless benefit, but Democrats and Republicans disagree on the size and scope of the bill.

Democrats believe the current benefit should be extended to help unemployed workers pay their bills, but Republicans say the extra money is a disincentive for low-skilled workers to return to work and that extending it at the current level would slow the recovery. Republicans want to extend the benefit at a lower rate.

House Speaker Nancy Pelosi, a California Democrat, has called the House back into session to work on a bill to provide an additional $25 billion to the US Postal Service.