The pace of recovery in the US labor market and the economy appear to be slowing down, after the latest weekly jobless claims report revealed that nearly 1 million Americans filed for fresh unemployment benefits over the previous week. Even as the coronavirus pandemic rages on across the country and the government’s stimulus measures reduce, the rise in unemployment levels again showcases a worrying outlook for the US economy.

In Q2 2020, the US economy contracted at the steepest pace in at least 73 years, and while economists expect GDP to recover in the current quarter, they have revised estimates for Q4 GDP lower. Weaker than expected economic data releases, rising unemployment and an ebb in the government’s financial aid are among the main drivers behind the possible delay in rebound.

On a positive note, however, the resurgence in the number of fresh infections appears to be slowing down, with rising cases mostly confined to some hot spots lately. Despite this, key economic indicators remain on the weaker side, including consumer confidence and employment across the US.

On Thursday, the Fed announced more measures to support economic growth with an aim to boost the employment levels as well as inflation. However, with the government initial round of stimulus measures drying up and no progress yet on the next round of financial aid, a significant number of Americans have been impacted.