US employment claims increase for first time since pandemic began

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US unemployment claims have increased for the first time since the pandemic started in March, with some 1.4 million people submitting claims last week.

Those new claims — which were up on 1.3 million the previous week — marked the 18th straight week that US unemployment claims have topped one million.

The news comes as Covid-19 continues to spike across a swathe of states where reopening plans have been pushed-back or wound-down amid a second spate of localised economic shutdowns.

Approximately 32 million people are now receiving unemployment assistance, said the Labor Department on Thursday, although some economists say the total is some 7 million less than that.

An additional 975,000 submitted claims under a new programme that covers self-employed and gig-economy workers, said the department.

The first increase in unemployment claims for 15 weeks also comes just three days before extra $600 (£472) weekly federal assistance payments are set to expire on Saturday.

Those weekly payments from the federal government — which come in addition to state assistance — were guaranteed under the $2 trillion (£1.6 trillion) relief package approved by Congress in March.

Republicans say those payments should be lowered, after studies suggested that around two-thirds of unemployed people were now receiving more in assistance than through their previous work.

Despite that, many are reliant on the support for jobs that no longer exist or fear returning to work during the pandemic.

Economists also argue that federal aid payments have allowed retail spending to rebound in recent months, whilst shoring-up the economy.

But as 22 states pause or reverse businesses reopening, say economists, the country’s economic recovery could be at risk.

Federal unemployment assistance is expected to lapse in some states, where any renewal to the programme will come too late to update systems.