Threat to evacuate U.S. diplomats from Iraq raises fear of war

By John Davison

BAGHDAD (Reuters) – Washington has made preparations to withdraw diplomats from Iraq after warning Baghdad it could shut its embassy, two Iraqi officials and two Western diplomats said, a step Iraqis fear could turn their country into a battle zone.

Any move by the United States to scale down its diplomatic presence in a country where it has up to 5,000 troops would be widely seen in the region as an escalation of its confrontation with Iran, which Washington blames for missile and bomb attacks.

That in turn would open the possibility of military action, with just weeks to go before an election in which President Donald Trump has campaigned on a hard line towards Tehran and its proxies.

Secretary of State Mike Pompeo threatened to close the embassy in a phone call a week ago to President Barham Salih, two Iraqi government sources said. The conversation was initially reported by an Iraqi news website.

By Sunday, Washington had begun preparations to withdraw diplomatic staff if such a decision is taken, those sources and the two Western diplomats said.

The concern among the Iraqis is that pulling out diplomats would be followed quickly by military action against forces Washington blamed for attacks.

Populist Iraqi cleric Moqtada al-Sadr, who commands a following of millions of Iraqis, issued a statement last week pleading for groups to avoid an escalation that would turn Iraq into a battleground.

One of the Western diplomats said the U.S. administration did not “want to be limited in their options” to weaken Iran or pro-Iranian militias in Iraq. Asked whether he expected Washington to respond with economic or military measures, the diplomat replied: “Strikes.”

The U.S. State Department, asked about plans to withdraw from Iraq, said: “We never comment on the Secretary’s private diplomatic conversations with foreign leaders … Iran-backed groups launching rockets at our Embassy are a danger not only to us but to the Government of Iraq.”

PERENNIAL RISK

In a region polarized between allies of Iran and the United States, Iraq is the rare exception: a country that has close ties with both. But that has left it open to a perennial risk of becoming a battle ground in a proxy war.

That risk was hammered home in January this year, when Washington killed Iran’s most important military commander, Qassem Soleimani, with a drone strike at Baghdad airport. Iran responded with missiles fired at U.S. bases in Iraq.

Since then, a new prime minister has taken power in Iraq, supported by the United States, while Tehran still maintains close links to powerful Shi’ite armed movements.

Rockets regularly fly across the Tigris towards the heavily fortified U.S. diplomatic compound, constructed to be the biggest U.S. embassy in the world in central Baghdad’s so-called Green Zone during the U.S. occupation after a 2003 invasion.

In recent weeks rocket attacks near the embassy have increased and roadside bombs targeted convoys carrying equipment to the U.S.-led military coalition. One roadside attack hit a British convoy in Baghdad, the first of its kind against Western diplomats in Iraq for years.

On Monday three children and two women were killed when two militia rockets hit a family home, the Iraqi military said. Police sources said Baghdad airport was the intended target.

Two Iraqi intelligence sources suggested plans to withdraw American diplomats were not yet in motion, and would depend on whether Iraqi security forces were able to do a better job of halting attacks. They said they had received orders to prevent attacks on U.S. sites, and had been told that U.S. evacuations would begin only if that effort failed.

DOUBLE-EDGED SWORD

Iraqis are concerned about the impact of November’s presidential election on the Trump administration’s decision-making.

While Trump has boasted of his hard line against Iran, he has also long promised to withdraw U.S. troops from engagements in the Middle East. The United States is already drawing down its force sent to help defeat Islamic State fighters in Iraq from 2014-2017.

Some Iraqi officials dismissed Pompeo’s threat to pull out diplomats as bluster, designed to scare armed groups into stopping attacks. But they said it could backfire by provoking the militias instead, if they sense an opportunity to push Washington to retreat.

“The American threat to close their embassy is merely a pressure tactic, but is a double-edged sword,” said Gati Rikabi, a member of Iraq’s parliamentary security committee.

He and another committee member said U.S. moves were designed to scare Iraqi leaders into supporting Prime Minister Mustafa al-Kadhimi, who has tried to check the power of Iran-aligned militia groups, with scant success.

HAWKS ON BOTH SIDES

The militias are under public pressure to rein in supporters who might provoke Washington. Since last year, public opinion in Iraq has turned sharply against political groups seen as fomenting violence on behalf of Iran.

Publicly, the powerful Iran-backed Shi’ite militia groups which control large factions in parliament have tried to distance themselves from attacks on Western targets.

U.S. officials say they think the Shi’ite militias or their Iranian backers have created splinter offshoots to carry out such attacks, allowing the main organizations to evade blame.

A senior figure in a Shi’ite Muslim political party said he thought Trump might want to pull out diplomats to keep them out of harm’s way and avoid an embarrassing pre-election incident.

Militia attacks were not necessarily under Tehran’s control, he said, noting that Iran’s foreign ministry had publicly called for a halt to attacks on diplomatic missions in Iraq.

“Iran wants to boot the Americans out, but not at any cost. It doesn’t want instability on its Western border,” the Shi’ite leader said. “Just like there are hawks in the U.S., there are hawks in Iran who have contact with the groups carrying out attacks, who aren’t necessarily following state policy.”

(Reporting by John Davison, additional reporting by Ahmed Rasheed; Editing by Peter Graff)

U.S. pension funds sue Allianz after $4 billion in coronavirus losses

By Tom Sims

FRANKFURT (Reuters) – Pension funds for truckers, teachers and subway workers have lodged lawsuits in the United States against Germany’s Allianz, one of the world’s top asset managers, for failing to safeguard their investments during the coronavirus market meltdown.

Market panic around the virus that resulted in billions in losses earlier this year scarred many investors, but no other top-tier asset manager is facing such a large number of lawsuits in the United States connected to the turbulence.

In March, Allianz was forced to shutter two private hedge funds after severe losses, prompting the wave of litigation the company says is “legally and factually flawed”.

Together, the various suits filed in the U.S. Southern District of New York claim investors lost a total of around $4 billion. The fallout has also prompted questions from the U.S. Securities and Exchange Commission, Allianz has said.

A spokesman for Allianz Global Investors said in a statement to Reuters: “While the losses were disappointing, the allegations made by claimants are legally and factually flawed, and we will defend ourselves vigorously against them.”

The plaintiffs are professional investors who bought funds that “involved risks commensurate with those higher returns,” the spokesman added.

The latest claims against Allianz and its asset management arm Allianz Global Investors last week include one from the pension fund for the operator of New York’s transport system, the Metropolitan Transportation Authority (MTA). It has 70,000 employees and made an initial investment of $200 million.

Similar suits have been filed against Allianz by pension funds for the Teamster labor union, Blue Cross and Blue Shield, and Arkansas teachers. The suits are seeking a jury trial to award damages.

The suits allege that Allianz Global Investors, in its Structured Alpha family of funds, strayed from a strategy of using options to protect against a short-term financial market crash.

The SEC’s inquiry continues and Allianz is cooperating. The SEC did not respond to requests for comment.

Attracting investors with an “all-weather” investing approach, Allianz “bet the house” and “out of greed … sacrificed the hard-earned pension and benefits of the MTA’s workers, who at the time were risking their lives under COVID keeping New York alive,” the MTA’s lawsuit said.

The cases are a second front of litigation for Allianz, one of Europe’s largest insurance companies. The Munich-based company and its competitors face suits for not paying claims related to business closures during the pandemic lockdowns.

The company’s insurance business as a whole has been under pressure as it faces claims for cancelled events, and a decline in demand for car and travel insurance. It expects to post the first decline in annual profit in nearly a decade.

At the end of March, Allianz informed investors it was liquidating two funds, as well as an offshore feeder fund. Investors lost 97% on one of the funds, the suits say.

In April, Morningstar downgraded its rating for the remaining funds to negative “because of the failure in risk management protocols and the uncertainty”.

Allianz disputed that rating and in July published an internal report that found that the losses “were not the result of any failure in the portfolio’s investment strategy or risk management processes”.

(Reporting by Tom Sims; editing by David Evans)

‘Take home’ lawsuits over COVID infections could be costly for U.S. employers

By Tom Hals

(Reuters) – U.S. businesses with COVID-19 outbreaks are facing an emerging legal threat from claims that workers brought coronavirus home and infected relatives, which one risk analysis firm said could cost employers billions of dollars.

The daughter of Esperanza Ugalde of Illinois filed in August what lawyers believe is the first wrongful death “take home” lawsuit, alleging her mother died of COVID-19 that her father contracted at Aurora Packing Co.’s meat processing plant.

The cases borrow elements from “take home” asbestos litigation and avoid caps on liability for workplace injuries, exposing business to costly pain and suffering damages, even though the plaintiff never set foot on their premises.

“Businesses should be very concerned about these cases,” said labor and employment attorney Tom Gies of Crowell & Moring, which defends employers.

The lawsuit against Aurora alleges that Ricardo Ugalde worked “shoulder to shoulder” on the company’s processing line in April when Aurora knew it had a coronavirus outbreak at its facility and failed to warn employees or adopt any infection prevention measures.

Aurora did not respond to a request for comment.

Between 7% and 9% of the roughly 200,000 U.S. COVID-19 deaths so far are believed to stem from take-home infections and the lawsuits could cost businesses up to $21 billion if the number of Americans fatalities reaches 300,000, according to Praedicat, a firm that evaluates risks for insurers.

Rob Reville, Praedicat’s chief executive, cautions that is a worst-case scenario and said the cases might cost far less, depending on how judges view the lawsuits.

The U.S. workers compensation system generally makes it difficult for workers to sue for COVID-19. The system caps liability for businesses and bars costly lawsuits in return for quick payments to employees, who do not need to prove fault.

But Esperanza Ugalde was not an employee of Aurora, so her family can sue the company. Depending on the circumstances, a successful wrongful death case can top $1 million in damages.

Take-home cases have been around for decades in asbestos litigation and courts have split on whether a business has an obligation to members of the public who have never been on their premises.

In 2013, a California jury awarded Rose-Marie Griggs $27.3 million in compensatory and punitive damages after she contracted mesothelioma that her lawyers argued was caused by asbestos fibers carried home in the 1950’s on the work clothes of her then-husband, who installed insulation for an affiliate of Owens-Illinois Inc.

The company appealed and two sides reached a private settlement before the appeal was heard.

CONTESTING THE ‘CAUSAL CHAIN’

Attorneys for both plaintiffs and companies said successful cases require a strong “causal chain” linking the sick family member to the worker and then to the business and the business’s alleged failure to adopt safety measures.

Miriam Alvarez Reynoso sued Byrne & Schaefer Inc, a manufacturer of electrical components in Lockport, Illinois, alleging negligence by the company led to her contracting COVID-19 and suffering “serious injuries to multiple organs.”

Reynoso’s lawsuit says she became infected while caring for her husband Servando Reynoso, a parts assembler at the company, who came home sick from work on April 8. It lists 18 categories of alleged shortcomings by Byrne & Schaefer, including failing to clean work areas and ignoring employees who said they had COVID-19 symptoms.

Company owner Tim Byrne said his five employees wore masks routinely before the pandemic to protect against dust and regularly used gloves.

“He was sick before anyone else,” said Byrne. “It’s difficult to prove after the fact.”

Lawyers said employers would likely be reluctant to settle the cases for significant sums until claims were vetted in the court system.

Peter Wozniak, an attorney with Barnes & Thornburg who represents employers, said the cases will test juror attitudes toward the behavior of plaintiffs, who need to show they protected themselves from other sources of infection.

“Are you always wearing a mask? Are you staying six feet away? Are you washing your hands,” he said. “It will be interesting and unpredictable with regards to people’s attitudes for individual responsibility.”

The best protection for business owners will be adopting and documenting measures to protect workers.

“If they had acted reasonably and if Aurora put these things in place prior to the death of Esperanza I don’t know if I would have taken the case,” said Bridget Duignan, who represents Ugalde’s daughter.

“But they did nothing.”

U.S. Midwest sees surge in COVID-19 cases as four states report record increases

By Anurag Maan and Lisa Shumaker

(Reuters) – Four U.S. states in the Midwest reported record one-day increases in COVID-19 cases on Saturday as infections rise nationally for a second week in a row, according to a Reuters analysis.

Minnesota reported 1,418 new cases, Montana 343 new cases, South Dakota reported 579 and Wisconsin had 2,902 new cases.

In the last week, seven mostly Midwest states have reported record one-day rises in new infections — Minnesota, Montana, Oregon, South Dakota, Utah, Wisconsin and Wyoming. Minnesota and Utah reported record increases two days in a row.

The United States recorded 58,461 new cases on Friday, the highest one-day increase since Aug. 7. The United States is reporting nearly 46,000 new infections on average each day, compared with 40,000 a week ago and 35,000 two weeks ago.

All Midwest states except Ohio reported more cases in the past four weeks as compared with the prior four weeks, according to a Reuters analysis.

Some of the new cases are likely related to an increase in the number of tests performed. In the last week, the country has performed over 1 million coronavirus tests three out of seven days — a new record, according to data from The COVID Tracking Project, a volunteer-run effort to track the outbreak.

However, hospitalizations have also surged in the Midwest and are not influenced by the number of tests performed.

Wisconsin’s hospitalizations have set new records for six days in a row, rising to 543 on Friday from 342 a week ago. South Dakota’s hospitalizations set records five times this week, rising to 213 on Saturday from 153 last week.

“Wisconsin is now experiencing unprecedented, near-exponential growth of the number of COVID-19 cases in our state,” Governor Tony Evers said in a video posted on social media.

Missouri, Nebraska, North Dakota and Wyoming have also seen record numbers of hospitalized COVID-19 patients in the past week.

Cases have also begun rising again in the Northeast, including the early epicenters of New York and New Jersey.

In New York, more than 1,000 people tested positive for COVID-19 on Friday for the first time since June 5, Governor Andrew Cuomo said on Saturday.

The United States recently surpassed 200,000 lives lost from the coronavirus, the highest death toll in the world.

(Reporting by Anurag Maan in Bengaluru and Lisa Shumaker in Chicago; Editing by Daniel Wallis)

Colleges reopenings in-person likely added 3,000 U.S. COVID-19 cases per day: study

By Vishwadha Chander

(Reuters) – Reopening college and university campuses for in-person instruction during late summer this year could be associated with more than 3,000 additional cases of COVID-19 per day in the United States in recent weeks, according to a new study.

The findings call into question the practicality of face-to-face classes during the COVID-19 pandemic, and are important as colleges and universities plan their spring 2020 semesters, said researchers from the University of North Carolina at Greensboro, Indiana University, the University of Washington and Davidson College.

The findings are yet to be peer reviewed and have not yet been published online.

To track COVID-19 cases and study their association with students attending classes at college campuses, the team used location data from a database of cellphone users who agreed to share information. The information was gathered from July 15 to Sept. 13.

They also looked at COVID-19 infection rates in counties with campuses, before and after colleges reopened and students arrived.

The researchers noted significant increases in counties where colleges had reopened for face-to-face instruction, especially in and around campuses with students who came from areas with higher incidences of COVID-19.

“We are able to predict between 1,000 and 5,000 additional cases a day due to colleges reopening for face-to-face instruction, with our best estimate being somewhere around 3,219 cases a day,” said Ana Bento, a co-author of the study, from Indiana University’s School of Public Health.

The study did not go into how many COVID-19 cases were “imported” – or from students who arrived on campuses – and how many were local transmissions.

The team also pointed out that asymptomatic cases may not have been caught unless testing was done on campuses regardless of symptoms, and that the study did not look at measures taken by individual colleges.

(Reporting by Vishwadha Chander in Bengaluru; editing by Jonathan Oatis)

U.S. CDC reports 202,329 deaths from coronavirus

(Reuters) – The U.S. Centers for Disease Control and Prevention (CDC) on Friday reported 6,958,632 cases of the new coronavirus, an increase of 42,340 cases from its previous count, and said that the number of deaths had risen by 918 to 202,329.

The CDC reported its tally of cases of the respiratory illness known as COVID-19, caused by a new coronavirus, as of 4 p.m. ET on Sept. 24 compared with its previous report a day earlier.

The CDC figures do not necessarily reflect cases reported by individual states.

(Reporting by Dania Nadeem in Bengaluru; Editing by Vinay Dwivedi)

French labs show how global supply bottlenecks thwart effort to ramp up testing

By Richard Lough

PARIS (Reuters) – Mass testing was meant to be the answer to the second wave. Politicians promised that with enough tests, conducted quickly enough, they could keep the coronavirus in check, without having to resort to lockdowns that crippled economies six months ago.

But so far, with a surge sweeping Europe just as students return to school and university, it hasn’t quite worked out that way. There aren’t enough tests, and they are taking too long.

Pierre-Adrien Bihl, who runs four labs that together conduct 800 tests a day in eastern France, has one explanation for what has gone wrong: a global supply chain that can’t keep up.

“I spend my days checking orders have been made and received and hassling my supplier to deliver, deliver, deliver,” he said. “But all their clients demand the same thing.”

French President Emmanuel Macron, like other European leaders, has pressed for a swift increase in tests. His government promises that anyone who needs a test can get one.

But five companies that operate laboratories in Paris and eastern France told Reuters there was simply no way they could work any faster, as long as they are struggling to obtain chemicals and test kits that are mainly produced abroad.

This week, Bihl said, he had to take his diagnostic machine offline for nearly 24 hours, after a four-day delay in the delivery of some single-use parts.

The shutdown forced Bihl to reduce testing appointments until the backlog could be made up, he said, adding that such shutdowns were taking place three or four times a month.

Arthur Clement, who runs four laboratories, said the U.S. manufacturer of his diagnostic machine, Cepheid, was sending him just 300 test kits per month at the end of the summer, as cases surged.

With his labs performing 25,000 tests per month, Clement had to send nearly all of them out to a third party, where they were taking up to 7-10 days to get results. Cepheid did not respond to a request for comment.

Clement ordered a new diagnostic machine from a South Korean manufacturer two months ago, which finally arrived last Friday, and now he says he can perform all tests in-house and deliver results in a day.

GLOBAL MARKET

In Paris, queues snake out of testing centers each day, with lines forming before sunrise at some. People with COVID symptoms are waiting on average three days for their results, according to official data, though for some the wait can be double.

France is now conducting more than 1.2 million polymerase chain reaction (PCR) tests per week in response to the epidemic, which has killed more than 31,000 people in the country and infected nearly half a million.

The French health ministry denies that there is a nationwide shortage of chemicals. It says there have been localized shortages in some parts of the country, but the overall supply is adequate. Health Minister Olivier Veran has said France has access to supplies of reagents equivalent to double the actual demand for tests.

But laboratories can’t just order chemicals from anywhere: testing machines typically require proprietary chemical kits and tools, some of which can be obtained only from the manufacturer.

The ministry recommends laboratories diversify their suppliers of testing machines, to mitigate the risk of one supply chain becoming blocked. But that means buying extra machines to duplicate capacity, which costs more money and can take months.

Suppliers of the machines to French labs include Cepheid and Becton Dickinson in the United States, Switzerland’s Roche, and France’s Biomerieux and Eurobio Scientific.

Cepheid, Roche and Eurobio Scientific did not respond to requests for comment on the supply of COVID equipment and reagents.

Becton Dickinson told Reuters in an email it was delivering more than 1 million tests per month globally. It acknowledged that this has fallen short of demand, but said it aims to scale up to 1.9 million per month by late 2020.

Biomerieux said its sites in France had spare capacity.

Lionel Barrand, one of the five laboratory operators who spoke to Reuters, said the supply-chain crunch was partly rooted in France’s reliance on imported reagents. He estimated 90% of COVID-19 reagents used in France were sourced overseas.

“We depend heavily on the global market,” said Barrand, who heads a laboratory industry group, the Syndicat National des Jeunes Biologistes.

Some of the French laboratories worry that U.S. suppliers such as Cepheid and Becton Dickinson are prioritizing labs in the United States, where healthcare costs are higher and profit margins bigger.

Becton Dickinson said it allocates test kits using quotas, which are set on the basis of the number of its testing machines in a country and the severity of outbreaks.

“We do not use pricing, margins or profit as a factor in our allocations,” the company said.

(Reporting by Richard Lough; Additional reporting by Matthias Blamont; Editing by Peter Graff)

U.S. CDC reports 201,411 coronavirus deaths

(Reuters) – The U.S. Centers for Disease Control and Prevention (CDC) on Thursday reported 6,916,292 cases of the new coronavirus, an increase of 41,310 cases from its previous count, and said that the number of deaths had risen by 1,136 to 201,411.

The CDC reported its tally of cases of the respiratory illness known as COVID-19, caused by the new coronavirus, as of 4 p.m. ET on Sept. 23 compared with its previous report a day earlier.

The CDC figures do not necessarily reflect cases reported by individual states.

(Reporting By Mrinalika Roy in Bengaluru; Editing by Vinay Dwivedi)

U.S. new home sales vault to near 14-year high in August

WASHINGTON (Reuters) – Sales of new U.S. single-family homes increased to their highest level in nearly 14 years in August, suggesting the housing market continued to gain momentum even as the economy’s recovery from the COVID-19 recession appears to be slowing.

The Commerce Department said on Thursday new home sales rose 4.8% to a seasonally adjusted annual rate of 1.011 million units last month, the highest level since September 2006. New home sales are counted at the signing of a contract, making them a leading housing market indicator.

July’s sales pace was revised upward to 965,000 units from the previously reported 901,000 units. Economists polled by Reuters had forecast new home sales, which account for about 14% of housing market sales, slipping 1% to a rate of 895,000-units.

The report followed on the heels of data this week showing sales of previously owned homes near a 14-year high in August.

The housing market is being powered by record-low mortgage rates and a pandemic-fueled migration to suburbs and low-density areas in search of more spacious accommodation as many people work from home. Unemployment has disproportionately affected low-wage workers in the services sector, who are typically young and renters.

In August, new home sales rose 5.0% in the Northeast. They jumped 13.4% in the South, which accounts for the bulk of transactions. But sales fell 1.7% in the West and decreased 21.4% in the Midwest. The median new house price fell 4.3% to $312,800 in August from a year ago. New home sales last month were concentrated in the $200,000 to $499,000 price range.

There were 282,000 new homes on the market last month, down from 291,000 in July. At August’s sales pace it would take 3.3 months to clear the supply of houses on the market, down from 3.6 months in July. About 71% of the homes sold last month were either under construction or yet to be built.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

U.S. labor market slowing as fiscal stimulus fades

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits unexpectedly increased last week, supporting views the economic recovery from the COVID-19 pandemic was running out of steam amid diminishing government funding.

The weekly jobless claims report from the Labor Department on Thursday, the most timely data on the economy’s health, also showed 26 million people were on unemployment benefits in early September. The faltering labor market recovery and a recent rise in new coronavirus infections has piled pressure on Congress and the White House to come up with another rescue package.

Federal Reserve Chair Jerome Powell told lawmakers on Wednesday that Congress and the U.S. central bank needed to “stay with it” in working to support the economy’s recovery. More fiscal stimulus is looking increasingly unlikely before the Nov. 3 presidential election.

“The high level of joblessness shows that the country isn’t out of the woods yet and it won’t be if the pleading of Fed officials for more stimulus isn’t heard by government officials down in Washington,” said Chris Rupkey, chief economist at MUFG in New York. “The economy is running on empty.”

Initial claims for state unemployment benefits rose 4,000 to a seasonally adjusted 870,000 for the week ended Sept. 19. Data for the prior week was revised to show 6,000 more applications received than previously reported. Economists polled by Reuters had forecast 840,000 applications in the latest week.

Unadjusted claims increased 28,527 to 824,542 last week. Economists prefer the unadjusted claims number given earlier difficulties adjusting the claims data for seasonal fluctuations because of the economic shock caused by the coronavirus crisis.

Six months after the pandemic started in the United States, jobless claims remain above their 665,000 peak during the 2007-09 Great Recession, though applications have dropped from a record 6.867 million at the end of March.

While the reopening of businesses in May boosted activity, demand in the vast services industries has remained lackluster, keeping layoffs elevated. Job cuts have also spread to industries such as financial services and technology that were not initially impacted by the mandated business closures in mid-March because of insufficient demand.

A total 630,080 applications were received for the government-funded pandemic unemployment assistance last week. The PUA is for the self-employed, gig workers and others who do not qualify for the regular state unemployment programs. Altogether, 1.5 million people filed claims last week.

Stocks on Wall Street were trading lower. The dollar gained versus a basket of currencies. U.S. Treasury prices rose.

STALLED PROGRESS

The claims report also showed the number of people receiving benefits after an initial week of aid dropped 167,000 to 12.58 million in the week ending Sept. 12.

Economists believed the so-called continuing claims are declining as people exhaust their eligibility for benefits, which are limited to 26 weeks in most states.

Indeed, just under one million workers exhausted their first six months of state unemployment benefits in August. At least 1.6 million workers filed for extended unemployment benefits in the week ending Sept. 5, up 104,479 from the prior week.

The continuing claims data covered the period during which the government surveyed households for September’s unemployment rate. The decline in mid-September implied a further decrease in the unemployment rate from 8.4% in August.

“Only faster progress against the virus itself will assuage the unemployment struggles of so many workers in fields like entertainment who can’t return to their jobs until social distancing restrictions are relaxed ,” said Andrew Stettner, senior fellow at The Century Foundation in New York.

The Fed has cut interest rates to near zero and vowed to keep borrowing costs low for a while, and has also been pumping money into the economy. Government money to help businesses has virtually dried up. Tens of thousands of airline workers are facing layoffs or furloughs next month.

A $600 weekly unemployment benefits supplement ended in July and was replaced with a $300 weekly subsidy, whose funding is already running out. The death toll from COVID-19 in the country topped 200,000 on Tuesday, the highest number of any nation.

The ebbing fiscal stimulus is already restraining the economy after activity rebounded sharply over the summer. Gross domestic product is expected to rebound at as much as a record 32% annualized rate in the third quarter after tumbling at a 31.7% rate in the April-June period, the worst performance since the government started keeping records in 1947.

But retail sales and production at factories moderated in August. Business activity cooled in September, reports have shown. Goldman Sachs on Wednesday cut its fourth-quarter GDP growth estimate to a 3% rate from a 6% pace, citing “lack of further fiscal support.”

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)