More Than a Million Americans Filed for Unemployment Last Week

June 12, 2020
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The market rally came to a swift halt yesterday, as Coronavirus Pandemic fears and economic uncertainty reemerged. While there’s still fundamental strength in many key stocks, investors are beginning to see the reality of the economic decline. The Department of Labor announced yesterday that 1.5 million Americans filed for unemployment in the first week of June.

Over 44 million people have filed for unemployment since mid-March. This figure tracks those who file for the first time and doesn’t count those who were receiving unemployment benefits before the health crisis.

How Bad is the News?

The figure of 1.5 million is seasonally adjusted, so it’s as accurate a number that the government can provide. In addition, 706,000 people across 43 states filed for pandemic unemployment assistance.

While these are big numbers, the trend is still sloping downwards. Jobs were actually added to the economy last month, so some of the people who previously filed for unemployment are now working again.

The jobless claim figure, which counts people who receive unemployment benefits for two weeks in a row, dropped from 21.3 million to 20.9 million last week.

Unemployment, Congress May Continue to Offer Support

Lawmakers have injected more than $2 trillion into the worker economy during the Coronavirus Pandemic, with cash payouts and additional funding for unemployment benefits. The package is set to expire at the end of July, but it could be extended.

Democrats in the house are in support of extending the deadline with more funding, but there is some pushback on the other side of the spectrum. Key Republican lawmakers are concerned that more funding will deter people from finding jobs.

In 38 states, the unemployment benefit and $600 weekly pandemic payment boost is either equal to or more than the average weekly wage of those who lost their jobs.

It has been proposed that the additional $600 be removed from the benefits package.

Watch Stocks Carefully Over the Coming Days

The Federal Reserve isn’t confident that the economy is ready to recover, and it stated this week that it will keep interest rates near-zero until at least 2022. It has estimated that gross domestic product will decline to -6.5% this year, meaning that America will officially be in a recession.

All of this news is important because it will change the activity of large investors. Once the negatives are calculated into stock prices, the market is likely to stabilize. Watching for the lows and investing in stable high-growth companies can help to protect a portfolio during this uncertain time.

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