U.S. layoffs hit nearly 39 million
Employment has yet to bounce back despite states slowly reopening
WASHINGTON—The number of Americans applying for unemployment benefits in the two months since the coronavirus took hold in the U.S. has swelled to nearly 39 million, the government reported Thursday, even as states from coast to coast gradually reopen their economies and let people go back to work.
More than 2.4 million people filed for unemployment last week in the latest wave of layoffs from the business shutdowns that have brought the economy to its knees, the Labor Department said. That brings the running total to a staggering 38.6 million, a job-market collapse unprecedented in speed.
The number of weekly applications has slowed for seven straight weeks. Yet the figures remain breathtakingly high — 10 times higher than normal before the crisis struck.
And the continuing rise shows that even though all states have begun reopening over the past three weeks, employment has yet to snap back and the outbreak is still damaging businesses and destroying jobs.
“While the steady decline in claims is good news, the labour market is still in terrible shape,” said Gus Faucher, chief economist at PNC Financial.
Federal Reserve chairman Jerome Powell said over the weekend that U.S. unemployment could peak in May or June at 20 per cent to 25 per cent, a level last seen during the depths of the Great Depression almost 90 years ago. Unemployment in April stood at 14.7 per cent, a figure also unmatched since the 1930s.
Over five million people worldwide have been confirmed infected by the virus, and about 330,000 deaths have been recorded, including more than 93,000 in the U.S. and around 165,000 in Europe, according to a tally kept by Johns Hopkins University and government data. Experts believe the true toll is much higher. U.S. President Donald Trump’s approval ratings have remained steady amid the crisis, underscoring the way Americans seem to have made up their minds about him. A poll from The Associated Press-NORC Center for Public Affairs Research found that 41 per cent approve of his job performance, while 58 per cent disapprove. That’s consistent with opinions of him throughout his three years in office.
Trump made a trip to Michigan to tour a Ford factory that has been retooled to manufacture ventilators, and he did not wear a face covering despite a warning from the state’s top law enforcement officer that a refusal might lead to a ban on his return. The president has been locked in a feud with the state’s Democratic governor over the outbreak and has also threatened to withhold federal funds over Michigan’s expansion of voting by mail.
Across the U.S., some companies have begun to rehire their laid-off employees as states have eased restrictions on movement and commerce. On Monday, more than 130,000 workers at the three major American automakers, plus Toyota and Honda, returned to their factories for the first time in two months.
Still, major employers continue to cut jobs. Uber said this week that it will lay off 3,000 more employees because demand for rides has plummeted. Digital publishers Vice, Quartz and BuzzFeed; magazine giant Condé Nast; and the owner of The Economist magazine announced job cuts last week.
Stephen Stanley, chief economist at Amherst Pierpont, said the latest layoffs may be particularly worrisome because they are happening even as states reopen. That could mean many companies see little hope of a substantial economic recovery any time soon and still feel a need to cut jobs.
“There’s a high probability that those layoffs could persist for longer than those that were a function of (businesses) just being closed,” Stanley said.
The latest figures do not mean 38.6 million people are out of work. Some have been called back, and others have landed new jobs. But the vast majority are still unemployed. An additional 1.2 million people applied for unemployment last week under a federal program that makes self-employed, contractor and gig workers eligible for the first time.