New US unemployment claims fell to 1.3 million last week

Though still at record highs, the number of people seeking aid has been slowly declining with nearly 18 million American workers receiving jobless benefits

A man walks past a row taxis at a garage in the Brooklyn borough of New York City. Initial jobless claims in regular state programmes fell by 99,000 to 1.31 million in the week ended July 4, Labour DeShow more

Applications for unemployment benefits in the US declined last week by more than projected, easing concerns of a renewed downturn in the labour market after several large states reported a pickup in coronavirus cases.

Initial jobless claims in regular state programmes fell by 99,000 to 1.31 million in the week ended July 4, Labour Department data showed Thursday. The median forecast in a Bloomberg survey of economists called for 1.375 million.

Continuing claims — the total number of Americans claiming ongoing unemployment benefits in state programs — declined to 18.1 million in the week ended June 27, compared with a median projection of 18.8 million.

The larger-than-forecast fall in initial jobless claims reassured investors about the recovery of the world’s biggest economy with US equity futures trading modestly higher.

Futures on the S&P 500 Index increased 0.1 per cent as of 4:34pm UAE time. The dollar slipped and Treasuries nudged higher.

In Europe, stocks rose for the first time in three days, with shares in the region’s largest technology company, SAP, jumping over 7 per cent after it reported better-than-expected second quarter revenue on returning demand for software in Asia.

The Stoxx Europe 600 Index rose 0.4 per cent. The UK's FTSE 100 Index declined 0.4 per cent.

Gold held above $1,800 an ounce. Oil was steady around $41 a barrel in New York after swelling US crude stockpiles raised fresh concerns about oversupply.

Investors continue to largely look past news of rising virus infections, concentrating on the continued reopening of economies. Confidence in improving economic data and policy support measures has mostly held firm, even as Hong Kong reported its biggest jump in cases since the start of the pandemic. The number of US infections topped 3 million, more than a quarter of the global total.

“Risk is bouncing back broadly in equities but the real show is in Chinese equities, US technology stocks and then gold,” said Steen Jakobsen, chief investment officer at Saxo Bank. “US Covid-19 cases rose yesterday to a new record and signs are now emerging that daily deaths are on the rise nationally which could suddenly become a new risk factor for the market.”

Elsewhere, Chinese equities outperformed as the Shanghai Composite notched an eighth day of gains, helped by signals of official support and strong demand from retail traders.

The MSCI Asia Pacific Index climbed 0.6 per cent. The MSCI Emerging Market Index jumped 1.7 per cent to 1,070.14.