U.S. Initial Jobless Claims Climbed to 742,000 Last Week; 707k Expected

The number of Americans filing initial claims for state jobless benefits last week unexpectedly rose to 742,000, as concerns mounted that soaring COVID-19 cases will further stifle the recovery in the labor market.

Economists had expected a drop to 707,000. The prior week’s figure was revised up to 711,000, according to the Labor Department report. The increase was the first in six weeks. The increase in claims was largest in California and Washington, while Illinois, Kentucky and Georgia all posted falls.

The number of continuing claims fell to 6.372 million, a little lower than forecast.

The number of people hospitalized with the virus rose to a new record high of over 79,000 on Wednesday, while the death count hit its highest since early May.

Many states are imposing fresh rounds of social distancing restrictions, affecting businesses. Meanwhile, economic growth is slowing as a boost from fiscal stimulus earlier in the year peters out. The economy fell into recession in February, rebounding strongly in the third quarter before losing momentum again from October onward.

Elsewhere, the Philadelphia Federal Reserve’s monthly business survey painted a picture of slowing manufacturing activity, albeit at a more gentle pace than expected. The main index fell by less than expected to 26.3 from 32.3 in September.