Investors Give New Job-Loss Numbers a Wobbly Greeting

Unemployment continues to slow, though Wall Street focused on stimulus packages on Capitol Hill and abroad. 

A new piece of street art by The Rebel Bear has appeared on a wall in Leith, Edinburgh, as Scotland is moving into phase one of the Scottish Government’s plan for gradually lifting lockdown. (Jane Barlow/PA Wire via AP)

MANHATTAN (CN) — New unemployment claims fell for the ninth week in a row, though Wall Street flattened Thursday morning after a four-day rally.

At the opening bell, the Dow Jones Industrial Average fell 90 points, a 0.3% decrease, with the S&P 500 and Nasdaq both having similar percentage losses.

According to the latest numbers from the Labor Department, 1.8 million new unemployment insurance claims were filed during the week ending May 30. The number of claims in the Pandemic Unemployment Assistance program also dropped, at 623,000 new claims filed last week, down from 1.3 million the week before.

New unemployment claims have steadily dropped since March 20, when they hit 6.8 million new claims. Continuing claims increased by 650,000, however, bringing the total to 21.5 million total Americans unemployed last week. About 47 million claims have been filed since the pandemic struck in mid-March.

Wall Street has had no shortage of bad news recently, from the recent protests across America against police violence to rising tensions with China, but the market has become inured to such negative tidings. 

Investors have mainly turned their attention to Capitol Hill, where lawmakers are trying to put together another stimulus package.

Some Republicans have worried that doling out additional benefits past the July end date would entice workers to stay at home and keep unemployment numbers high. Democrats say the unemployment checks should keep flowing until the economy rights itself. 

Many expect a fourth stimulus package to pass — if it passes at all —sometime before lawmakers go on recess in August.

In addition to another stimulus, lawmakers have tinkered at the edges of existing programs, such as the Paycheck Protection Program.

Under the PPP’s current guidelines, small businesses have only eight weeks to spend their loans, but the Senate passed a House bill last night to extends that timeline to 24 weeks and grant additional flexibility on how the funds can be used.

The bill now awaits the president’s signature.

The PPP has been beset with numerous problems since its creation, but it has also been enormously popular among small businesses. 

According to a June 2 survey by the National Federation of Independent Business, more than three-quarters of small business owners have applied for a PPP loan, and more than 9 out of 10 who applied for a loan have received it. 

In Europe, markets slid compared with Wednesday after the European Central Bank announced it would nearly double its stimulus package, adding an additional 600 billion euros to its bond-buying program. The program now has 1.35 trillion euros, far greater than many analysts had expected.

“An ambitious and coordinated fiscal stance remains critical,” ECB President Christine Lagarde said in a statement, adding that the central bank’s measures should “as much as possible be targeted and temporary in nature in response to the pandemic emergency.”

At 8:30 a.m. EST, most markets on the continent remained flat, with the pan-European Stoxx 600 slightly down.

The number of people infected worldwide with Covid-19 has grown to nearly 6.5 million, while 386,000 have died. according to data compiled by Johns Hopkins University. In the United States, 1.8 million are confirmed to have had Covid-19, while nearly 107,000 have died.

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