Jobless claims rise, GDP shrinks as key benefit is set to expire

The sidewalk at Town and Country shopping center at Stroop and Far Hills was all but empty empty in this May photo. JIM NOELKER/STAFF
The sidewalk at Town and Country shopping center at Stroop and Far Hills was all but empty empty in this May photo. JIM NOELKER/STAFF

U.S. economy shrinks at record 32.9 percent rate

A day before key federal unemployment benefits are set to expire, new federal and state jobless numbers demonstrate that the recovery is slowing.

Claims for first time unemployment benefits rose from the week previous, with the U.S. Department of Labor reporting Thursday a national increase of 12,000 applications to just over 1.4 million claims in the week ending July 25.

Also Thursday, the federal government said the economy contracted at a record 32.9% annual rate last quarter.

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“The strength of the nascent recovery is highly uncertain,” said PNC Financial Chief Economist Guy Faucher. “Much of it depends on the path of the virus. The pickup in coronavirus cases in many parts of the country is very concerning. Many states are reimposing restrictions on economic activity, although in a more targeted way than earlier in the crisis.”

In Montgomery County, 1,401 new applications were filed for unemployment benefits last week, with nearly 20,600 claims ongoing.

In Butler County, there were 721 new claims, with 12,369 claims continuing. Warren County saw 379 new claims, with 6, 074 claims continuing.

And in Clark County, there were 275 new claims, on top of 4,101 continuing claims.

In Ohio, residents filed 27,937 initial or first-time benefits claims last week.

Ohioans filed 423,452 continued jobless claims last week, which were 352,850 fewer than the peak earlier this year, the Ohio Department of Job and Family Services said.

The total number of initial jobless claims filed in Ohio over the last 19 weeks (1,557,787) is more than the combined total of those filed during the last three years.

Nationally, the advance seasonally adjusted insured unemployment rate was 11.6 percent for the week ending July 18, an increase of 0.5 percentage point from the previous week’s rate.

The advance number for seasonally adjusted insured unemployment during the week ending July 18 nationally was 17,018,000, an increase of 867,000 from the previous week’s revised level.

Claims for jobless benefits have been lodged well above one million nationally since mid-March.

The new numbers came out a day before the extra $600 weekly in federal Pandemic Unemployment Assistance was set to expire Friday.

“The extended unemployment benefits set to expire for millions of the nation’s jobless workers will further impact the ailing economy as consumers struggle to pay for goods and services,” said Andrew Challenger, senior vice president at Challenger, Gray & Christmas, Inc. “The businesses that may have been benefiting from those consumers and shoring up neighborhoods may also begin to close at a faster clip.”

U.S. gross domestic product -- the total value of all goods and services produced nationally -- fell at a 32.9% annual rate in the second quarter, or a 9.5% drop compared with the same quarter a year ago. Both numbers are records.

“Continued spread of the virus is deterring consumers from spending and weighing heavily on industries such as travel and tourism, restaurants, and in-person entertainment,” PNC’s Faucher said. “As long as people are reluctant to be in large groups, the recovery will be soft.”

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