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​US jobless claims rise for first time in five weeks

The number of Americans applying for unemployment benefits rose for the first time in five weeks even though the economy and job market have been recovering briskly from the coronavirus pandemic.

Jobless claims edged up by 4,000 to 353,000 from a pandemic low 349,000 a week earlier, the Labor Department reported this morning. However, the four-week average of claims, which smooths out week-to-week volatility, fell by 11,500 to 366,500—lowest since mid-March 2020 when the coronavirus was beginning to slam the U.S.

At least 25 states led by Republican governors have pulled out of federal government-funded unemployment programs, including a $300 weekly payment, which businesses claimed were encouraging unemployed Americans to stay at home.

There is, however, no evidence that the early termination of federal benefits has led to an increase in hiring in these states. The government-funded benefits will expire on Sept. 6, affecting more than 11 million people.

Continuing claims also showed little change, dropping 3,000 from the previous week to 2.86 million, according to data that runs a week behind the headline number. However, the four-week moving average tumbled 108,500 to just over 2.9 million.

U.S. corporate profits soar in second quarter; economic growth raised

U.S. corporate profits surged to a fresh record high in the second quarter, boosted by robust demand and higher prices, suggesting that an anticipated slowdown in economic growth this quarter because of soaring COVID-19 cases could be temporary.

The jump in profits reported by the Commerce Department on Thursday was despite businesses facing increased costs owing to shortages of raw materials and labor. The resurgence in infections driven by the Delta variant of the coronavirus is chipping away demand for services like air travel and cruises, leading economists to cut their third-quarter growth estimates.

Gross domestic product increased at a 6.6% annualized rate, the government said on Thursday in its second estimate of GDP growth for the April-June period. That was revised up from the 6.5% pace of expansion reported in July.

Economists polled by Reuters had expected that second-quarter GDP growth would be raised to a 6.7% pace. The economy grew at a 6.3% rate in the first quarter, and has recouped the steep losses suffered during the two-month COVID-19 recession.

The level of GDP is now 0.8% higher than it was at its peak in the fourth quarter of 2019. The upward revisions to last quarter's GDP growth reflected a slightly more robust pace of consumer spending and business investment than initially estimated. Demand was driven by one-time stimulus checks from the government to some middle- and low-income households.

The Federal Reserve has maintained its ultra-easy monetary policy stance, keeping interest rates at historically low levels and boosting stock market prices.

Reference: Reuters, CNBC