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US unemployment claims rise unexpectedly to 351,000 after falling to pandemic low a week earlier

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The number of Americans filing for unemployment benefits rose again last week as concerns mount over the rise in Covid-19 infections due to the hyper-contagious Delta strain and its impact on the economy.

Last week, 351,000 people filed for unemployment benefits, a peak of 16,000 from the week before, when 335,000 people applied, according to data from the Department of Labor (DOL).

In the first week of September, there were only 310,000 claims for unemployment benefits – a new low during the pandemic. At the height of the pandemic last year, approximately 6.1 million new claims were filed each week.

The number of Americans filing for unemployment benefits rose again last week as concerns mount over the rise in Covid-19 infections due to the hyper-contagious Delta strain and its impact on the economy

Inflation and labor shortages have held back further economic progress in recent weeks.  The country only offered 235,000 new jobs last month, after about a million were added in June and July

Inflation and labor shortages have held back further economic progress in recent weeks. The country only offered 235,000 new jobs last month, after about a million were added in June and July

But despite the surge in new applications in the past two weeks, the number of Americans seeking unemployment benefits appears to be declining at a steady pace since peaking at 900,000 in early January.

But the spread of the Delta variant this summer has again put pressure on the economy and the labor market.

According to the NY Post, more than 2.8 million Americans have received traditional unemployment benefits since 2020, a number twice as high as it was before the pandemic, but significantly lower than around this time last year.

In September last year, about 13 million Americans were on traditional unemployment benefits.

While the economic recovery is underway, inflation and labor shortages have held back further progress in recent weeks and officials have warned that the recovery will take a long time.

The country offered just 235,000 new jobs last month, after adding about a million in both June and July, leaving it well short of expectations and raising concerns that the economic recovery is slowing down.

The workforce declined sharply in sectors that require face-to-face contact with the public, especially restaurants, hotels and retail.

Restaurants and bars cut 42,000 jobs in August, after the hospitality and food industry as a whole added 115,000 jobs in July, according to a report by the Labor Inspectorate and the Labor Department’s Labor Turnover Survey.

On Tuesday, the US reported more than 120,000 new cases of Covid-19 and about 1,020 new deaths, according to the Center for Disease Control and Prevention, down from the 180,000 new infections reported last month.

On Tuesday, the US reported more than 120,000 new cases of Covid-19 and about 1,020 new deaths, according to the Center for Disease Control and Prevention, down from the 180,000 new infections reported last month.

Hotels added only 7,000, the least since February.

But President Joe Biden shared an optimistic view on the numbers at a news conference last Friday.

“What we are seeing is an economic recovery that is sustainable and strong. Biden’s plan is working, we’re getting results,” he told the White House Friday morning.

But he admitted that the Delta variant was why Friday’s report “wasn’t stronger.”

On Wednesday, the Federal Reserve reported that U.S. economic activity “declined” in July and August, partly due to a slump in dining out, travel and tourism related to concerns about the Delta variant.

The day before, the US reported more than 120,000 new cases of Covid-19 and about 1,020 new deaths, according to the Center for Disease Control and Prevention, down from the 180,000 new infections reported last month.

Also on Tuesday, Moody’s Analytics released a report warning that the US Treasury Department will run out of money by October unless Congress raises its debt ceiling.

Currently, Republicans are refusing to raise the debt limit over concerns about Biden’s massive spending plans.

Mark Zendi, chief economist at Moody’s Analytics, said in his latest report that the Biden administration and Congress are “playing a dangerous game with the debt limit.”

He cited the urgent Sept. 30 deadline — by which Congress must decide whether to “renew expiring government powers for the fiscal year 2022 beginning Oct. 1.”

The blow would come in the form of a depression that could rival the Great Recession, according to CNN Business.

Moody’s predicted that a debt default would wipe out nearly six million jobs and raise the unemployment rate in the country from 5.4 to nine percent.

Share prices would also be cut by a third, wiping out about $15 trillion in household wealth, as reported by CNN.

Despite the threat of such a major economic downturn, Republicans have refused to raise the debt ceiling because of the Biden administration’s billion-dollar spending plans.

In August, Democrats unveiled a $3.5 trillion budget in funding increases for economic and environmental programs. The 92-page measure laid the groundwork for legislation that – over a decade – would pour mountains of money into their top priorities.

That included money for education, health care and environmental programs, plus tax breaks for families — funded largely by tax increases for the rich and for corporations.

The Senate later passed a bipartisan version of the infrastructure bill last month with a price tag of $1.2 trillion, which House Democrats would not approve without first approving the $3.5 trillion reconciliation package.

Manchin, the most moderate Democrat in the Senate, said he could not support the current reconciliation.

If he doesn’t give in, Congress could be in a deadlock where none of the massive pieces of legislation will get through — something Moody’s noted was part of the problem.

Moody’s found that the worst-case scenario would be if Congress did not act to lift the debt ceiling and the stalemate continued.

Mark Zendi, the chief economist at Moody's Analytics, said in his latest report that the Biden administration and Congress are

Mark Zendi, the chief economist at Moody’s Analytics, said in his latest report that the Biden administration and Congress are “playing a dangerous game with the debt limit.” US default on debt could be a ‘catastrophic blow’ to the economic recovery from Covid-19 and lead to the loss of six million jobs, according to latest Moody’s analysis

The US Treasury Department said it will run out of money by October unless Congress raises its debt ceiling.  The chart shows how the department predicts it will run out of money from now until October 20, when it owes more than $20 billion to Social Security recipients.

The US Treasury Department said it will run out of money by October unless Congress raises its debt ceiling. The chart shows how the department predicts it will run out of money from now until October 20, when it owes more than $20 billion to Social Security recipients.

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