New applications for unemployment benefits have held persistently at high levels in recent weeks, suggesting layoffs remain elevated as the coronavirus pandemic continues and the labor market’s momentum is easing.

Initial claims for jobless benefits have held roughly steady at more than 1.3 million a week since late June, according to the Labor Department. That halted what had been a swift decline from a peak of 6.9 million in late March, when the pandemic and business closures shut down parts of the U.S. economy. The level...

Chicago Fed President Charles Evans said the U.S. economy would face a much steeper climb should Congress fail to at least partially extend more generous unemployment benefits and take broader fiscal policy action to combat the effects of the coronavirus pandemic.

“Trouble is brewing with the expiration of these relief policies,” Mr. Evans told reporters Monday during a virtual briefing. “If we go very long without somehow addressing the reduction and evaporation of that support, I think it’s going to show up in lower aggregate...

SÃO PAULO—Brazil’s central bank cut its key Selic lending rate to a record low Wednesday and left the door open for more cuts, as the outlook for inflation remains below target amid the impact of the coronavirus pandemic on the economy.

The bank’s monetary policy committee trimmed the Selic to 2% from 2.25%, the ninth consecutive reduction. Any future cuts might take place with more time between changes amid greater-than-normal uncertainty about economic growth, the bank said in its statement.

India’s central bank left its key lending rate unchanged Thursday and said it would monitor inflation and wait to see if recent easing moves were enough to lift the economy, which was hard hit by the Covid-19 pandemic.

The Reserve Bank of India’s monetary policy committee maintained its policy repo rate at 4.00%, Gov. Shaktikanta Das said. The central bank also kept its reverse repo rate at 3.35%.

Mr....

LONDON—The Bank of England said the U.K. economy will take until the end of 2021 to make up the ground lost during the pandemic, after suffering what it estimates was the steepest second-quarter fall in output among rich countries.

Officials estimate the economy shrunk by around 20% between April and June as a nationwide lockdown to contain the coronavirus came into force. That compares with estimates of 9.5% for the U.S. and 12% for the eurozone, highlighting the scale of the U.K.’s economic hit.

More than a decade ago consumers and bankers thought houses were surefire investments whose prices never went down. That ended in 2008 with a financial crisis.

It may be time to revisit the thesis. In a world of zero interest rates and bubbly stock markets, your house may once again offer the best returns of any asset class—provided you think of “return” the right way.

Total...

The Monetary Authority of Singapore on Wednesday announced initiatives to support the use of the “Singapore overnight rate average,” a new benchmark interest rate.

The central bank will issue floating-rate notes based on the SORA benchmark every month, starting Aug. 21, it said. The action is aimed at facilitating the adoption of SORA as a floating-rate benchmark, providing a pricing reference for SORA cash products and spurring hedging activities via the SORA derivatives market.

WASHINGTON—Many economists expect last week’s expiration of $600 in enhanced weekly unemployment benefits to lead to a sharp drop-off in household spending and a setback for the U.S. economy’s near-term recovery, even if the lapse turns out to be temporary.

The federal government was providing billions of dollars a week in extra jobless payments to workers—more than 12 million people in mid-July, the Labor Department said. The program, approved as part of a coronavirus aid package, expired at the end of July, and Congress...

Federal Reserve Vice Chairman Richard Clarida said Wednesday he expects the economy to grow in the third quarter, adding that activity could return to pre-pandemic levels by the end of 2021.

The coronavirus hasn’t yet inflicted long-term damage to the U.S. economy, he said in an interview with CNBC, but the risk will grow the longer the pandemic lasts.

Mr....

WASHINGTON—Trade between the U.S. and the rest of the world picked up in June, with both exports and imports rising as the global economy began climbing out of the recession caused by the coronavirus pandemic.

The deficit narrowed 7.5% from May to $50.7 billion, the Commerce Department said in a report Wednesday. Exports rose 9.4% to $158.3 billion in June, while imports rose 4.7% to $208.9 billion.

Economists...

WASHINGTON—The Treasury Department said Wednesday it expects the government’s borrowing needs to moderate somewhat this quarter but remain elevated amid an unprecedented surge in federal spending to combat the coronavirus pandemic.

The Treasury plans to increase auction sizes across all securities, particularly 7- and 10-year notes and 20- and 30-year bonds, as part of a broader effort to shift government financing to longer-dated maturities.

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Is the U.S. Labor Market Already Losing Steam? The Labor Department’s July jobs report is out Friday at 8:30 a.m. ET. Economists are forecasting a net gain of 1.482 million jobs, a figure that in […]

Thailand’s central bank maintained its benchmark interest rate at a record low level on Wednesday, after having taken a series of easing steps earlier this year to bolster the economy amid the Covid-19 pandemic.

The Bank of Thailand said it maintained its one-day repurchase rate at 0.50%. The central bank said its policy committee voted unanimously to keep the rate unchanged.

Five...

When the coronavirus brought the world economy to a halt in March, it fell to the U.S. Federal Reserve to keep the wheels of finance turning for businesses across America.

And when funds stopped flowing to many banks and companies outside America’s borders—from Japanese lenders making bets on U.S. corporate debt to Singapore traders needing U.S. dollars to pay for imports—the U.S. central bank stepped in again.

The...

The Reserve Bank of Australia left its policy settings unchanged Tuesday as it navigates the country’s worst economic contraction since the 1930s and said it intends to buy more bonds to cap yields.

The RBA kept its official cash rate at a record-low 0.25% and reaffirmed its 0.25% target for the yield on three-year government bonds, as it weighs the economic impact of tougher lockdown measures to contain the coronavirus in the southeastern state of Victoria.

Factories across Europe and parts of Asia increased production in July, but the upswing was held back by weak overseas demand, suggesting a long and precarious road ahead for the global economy.

Export orders were soft across most of the countries surveyed in July by research firm IHS Markit, and activity contracted in two export powerhouses, Japan and South Korea. With the international outlook uncertain, manufacturers in most countries saved costs in July by cutting jobs.

The July jobs report, to be released Friday, could be among the most politically consequential of the economic downturn caused by the coronavirus pandemic.

The labor market has swung wildly since the virus nearly halted the economy in mid-March. Consumer fear of infection and government-mandated shutdowns of businesses caused the loss of more than 20 million jobs in April, the largest decline in a single month in Labor Department records back to the late 1930s. Allowing employers to reopen and recall workers subsequently resulted...

The Federal Reserve is preparing to effectively abandon its strategy of pre-emptively lifting interest rates to head off higher inflation, a practice it has followed for more than three decades.

Instead, Fed officials would take a more relaxed view by allowing for periods in which inflation would run slightly above the central bank’s 2% target, to make up for past episodes in which inflation ran below the target.

“It...

The U.S. jobs report for July caps a full week of data that should shed light on the global pace of recovery from a sharp, severe recession caused by responses to the new coronavirus.

Monday

China’s Caixin manufacturing index, a private gauge of factory activity tilted toward small and private companies, is expected to show another month...

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. About 30 million Americans have lost an extra $600 a week in unemployment benefits, the dollar posted its worst month in nearly a decade and the next jobs report could be make-or-break for policy makers […]

Criticism the Federal Reserve is facing over its purchases of corporate bonds issued by energy firms was pretty much inevitable.

Over recent weeks, a number of activist groups, as well as a former Fed official and Obama-era Treasury official, have called on the central bank to stop buying bonds issued by energy firms. They say Fed support of the energy sector increases financial instability and climate change risks so the central bank should avoid these purchases.

After a short yet sharp pandemic-induced plunge, Canadian economic output surged in May on the strength of retail spending and the resumption of construction activity. Canada’s official data-gathering agency expects another stellar month of growth in June.

The May rebound, which smashed the previous record for month-over-month increase, suggests Canada’s economic recovery is now in full swing, with some economists arguing the Bank of Canada’s outlook for growth and inflation might be a tad too dour.

FRANKFURT—Stringent lockdowns weighed heavily on Europe’s economy in the second quarter, causing a record decline that was even more severe than in the U.S., but the continent’s strategy of containment coupled with aggressive stimulus is fanning hopes of a robust recovery.

The eurozone’s gross domestic product fell 40.3% annually in the three months through June, exceeding the U.S. economy’s 32.9% contraction, according to data published Friday. That is by far the sharpest decline since comparable records began in 1995, according...

U.S. consumer spending likely rose in June but appears to have weakened in recent weeks as coronavirus cases increased, restraining the economic recovery.

Americans’ ability and willingness to spend will largely determine the economy’s path in the coming weeks and months. The Commerce Department will post official data on June household income and spending on Friday at 8:30 a.m. ET.

Household...

Environmental groups are pressing the Federal Reserve to end its purchases of energy sector corporate bonds as part of its broader effort to support financial markets as the U.S. navigates the severe economic stress of the coronavirus pandemic.

“Through these purchases, the [Federal Reserve] Board is potentially exposing the public to financial losses through credit risk, market risk, and operational risk due to exacerbation of the climate crisis,” according to a letter signed by several groups and that will be sent to Federal...