Jobless claims again tick upward
Hike in virus cases darkens many companies’ hiring prospects.
The number of new state unemployment claims dipped last week, but job losses continue to batter the economy as rising coronavirus cases pushed some regions of the country to reverse course and reimpose shutdown orders on businesses.
More than 1.3 million workers, seasonally adjusted, filed new claims for regular unemployment benefits last week, the government reported Thursday. Another million first-time claims were filed under the federal Pandemic Unemployment Assistance program. Taken together, the report paints a disappointing picture of recovery: Total new unemployment claims have edged up from their mid-June lows.
Although hiring nationwide has picked up in recent weeks, most of the payroll gains were temporarily laid-off workers who were rehired. The pool of employees whose previous jobs have disappeared and who must search for new ones has grown.
“Their circumstances may be more challenging to rectify than those who were laid off because of a temporary closure,” said Elizabeth Akers, who was a staff economist with the Council of Economic Advisers under President George W. Bush. “Finding new jobs will be more difficult. There’s been scarring in the economy.”
Recent readings from employment sites also point to more lasting damage to the labor market. Overall job openings at ZipRecruiter rose last week, for instance, but the number of new jobs posted declined for the fourth week in a row.
“For now, at least, that suggests the increase in vacancies is being driven by a slowdown in hiring, not an increase in labor demand,” said Julia Pollak, ZipRecruiter’s labor economist.
“Recent jobs reports are encouraging, but the increase in employment entirely reflects rehires of workers on temporary layoff,” she added. “The recovery in new hiring has yet to begin.”
The longer the pandemic dampens or halts shopping, dining out, travel and business operations, the more likely it is that jobs put on a brief hold simply vanish.
Brooks Brothers, the nation’s oldest apparel brand in continuous operation, filed for bankruptcy this week and permanently closed 51 stores. And airlines announced that they might lay off or furlough tens of thousands of employees in October despite billions of dollars in government aid because air travel has not rebounded.