Stocks slump as weekly jobless claims rise above 1 million

Stocks slump as weekly jobless claims rise above 1 million

Stocks slumped Thursday after the Labor Department reported a rise in weekly jobless claims.

The Dow Jones Industrial Average lost 121 points as the market opened Thursday, falling 0.4 percent. The S&P 500 also fell 0.4 percent and the Nasdaq composite sank 0.3 percent.

The drop comes after the Labor Department reported that initial claims for unemployment benefits rose to a seasonally adjusted 1,116,000 in the week ending Aug. 15. Weekly jobless claims dipped below 1 million in the previous week for the first time in five months and economists had expected the figure to drop again.

The unadjusted number of claims, which some economists say better captures the unique aspects of the coronavirus recession, also climbed to 891,510 last week, rising by 52,776 claims.

Last week’s unexpected rise in jobless claims could be another sign that the economic recovery from the pandemic-driven recession is continuing to slow. 

The Trump administration and lawmakers have been locked in a months-long stalemate over another fiscal stimulus bill that economists across ideological lines say is necessary to prevent a deeper downturn.

Democrats and Republicans are deeply divided over how to extend a boost to unemployment benefits that expired on July 31, how much aid to provide to state and local governments and pandemic-related liability protections for businesses that are trying to reopen amid the pandemic.