The number of initial jobless claims in the US rose to 1.43 million last week amid a resurgence in Covid-19 cases, following an increase in the previous week, the Labor Department reported.
In the week ending July 25, the number of Americans filing for unemployment benefits increased by 12,000 from a revised 1,422,000 in the prior week, Xinhua news agency quoted the Department as saying on Thursday.
Initial jobless claims peaked at a record 6.87 million in the week ending March 28 amid Covid-19 shutdowns, and the figures have declined for 15 weeks consecutively, before the trend was reversed in the week ending July 18.
With the latest numbers, a staggering 54.1 million initial jobless claims have been filed over the past 19 weeks, indicating the mounting economic fallout of the Covid-19 pandemic.
The new report also showed that the four-week moving average, a method to iron out data volatility, increased by 6,500 to 1.37 million.
As Congress continues to debate the extension of the extra $600 unemployment benefits, which are set to expire today, House said the "stakes are high" with more than 30 million workers collecting unemployment insurance.
The Senate Republicans' $1 trillion proposal, revealed on Monday, would slash the federal unemployment benefits from $600 to $200 through September, giving an unemployed worker about 70 per cent of previous wages when combined with state benefits, while Democrats want to maintain the current level of benefits through January.
The White House and Republicans have contended that the $600 benefits have created a financial disincentive for people to return to work, an argument refuted by some economists, including Nobel laureate economist Paul Krugman.
"The bottom line is that all those concerns that we were keeping unemployment high by making it too comfortable had zero basis in reality," Krugman said on Twitter. "UI (unemployment insurance) was helping employment, not hurting it."
The unemployment data was released on the same day when the US Commerce Department reported that the economy contracted at an annual rate of 32.9 per cent in the second quarter, the sharpest decline in decades.
Several US states, especially those in the South and West, have recently seen an uptick in Covid-19 cases, and over 20 states have already paused or partially reversed reopening efforts amid an alarming resurgence of cases, which could undermine the nascent economic recovery..