The U.S. labor market is sending troubling signals that the resurgence in COVID-19 cases is weighing on the economic recovery.
On Thursday, the latest weekly data on initial jobless claims showed that while claims fell to 1.31 million for the week ending July 4, an increasing number of workers filed for Pandemic Unemployment Assistance (PUA) for the fourth straight week.
Last week, 1.04 million people filed PUA claims for the first time, an increase of 42,000 over the prior week and up from 880,000 two weeks prior.
“The news behind the headline numbers, which cover only regular state unemployment insurance programs, is disconcerting,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
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“The number of people claiming for Pandemic Unemployment Assistance – PUA, which is aimed at gig workers, freelancers, the self-employed and other people who don’t qualify for regular state programs – has increased in the past four weeks straight,” Shepherdson adds.
“This suggests that the renewed slowdown in the South and West … is hitting non-traditional workers harder than those in regular payroll jobs. Continuing PUA claims are now rising too, after falling in late May and early June.”