Applications for aid in the U.S. parallel rising infections geographically.
WASHINGTON — More than a million Americans sought unemployment benefits last week, indicating companies are cutting more jobs as the resurgent coronavirus scythes through the Sunbelt and some of the nation’s most populous states.
Layoffs in Florida, Georgia and California rose by tens of thousands, the Labor Department said Thursday in its weekly report.
The number of laid-off workers seeking assistance remained stuck at 1.3 million — a stunning number that, while lower than the previous week, illustrated the devastation wrought by widespread shutdowns.
It was the 17th consecutive week jobless claims surpassed 1 million.
Infections are rising in 40 states, and 22 states either have paused or reversed efforts to reopen their economies, the Bank of America reported. The rising number of virus cases threatens to push what appeared to be a recovering nation into critical condition.
Applications for aid paralleled rising infections geographically. Claims in Florida doubled to 129,000, and in Georgia they rose nearly one-third to 136,000, the Labor Department says. In California, they increased 23,000 to nearly 288,000. Applications also went up in Arizona and South Carolina.
“Conditions in the labor market remain weak, and the risk of mounting permanent job losses is high, especially if activity continues to be disrupted by repeated virus-related shutdowns,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
The number of people seeking jobless aid shrank in New Jersey and New York and in another hot spot, Texas, a state that has been hammered by job cuts this year in the energy sector.
There was a surprisingly strong report Thursday from the Census Bureau on retail sales, though there is trouble below the surface there as well.
While sales climbed 7.5 percent in June, private credit card data showed those gains stalled toward the end of the month as new clusters of infections emerged.
“While today’s report gives the illusion of a fearless consumer spending lavishly, the reality is more sobering: Consumers are increasingly fearful amid new spikes in COVID-19 cases and a looming fiscal cliff,” said Lydia Boussour, senior U.S. economist at Oxford Economics.
The country has entered a phase in which businesses and consumers alike are adjusting to the perpetual risk of viral outbreaks. Retailers already are relying on skeleton crews. Bars in Texas are again shuttered because of surging infections.
According to an analysis of credit cards by JPMorgan Chase, consumer spending, the largest driver behind the U.S. economy, began to stall at the end of June.
The total number of people who are receiving jobless benefits nationwide dropped 400,000, to 17.3 million last week, the government said, suggesting that hiring in some regions could offset some of the job losses in states with surging COVID-19 cases.
But huge U.S. companies continue to lay off people. American Airlines warned Wednesday that it may have to cut up to 25,000 jobs in October because of sharply reduced air travel. Airlines are barred from layoffs until then as a condition of federal aid they have received.
American followed United Airlines, which warned 36,000 of its employees last week that they may lose their jobs.
The uncertainty of what comes next is heightened by the pending expiration of many of the government support programs that have shored up the finances of both businesses and families.
The government’s small business loan program, known as the Paycheck Protection Program, will stop taking applications Aug. 8. More than $500 billion already has been loaned, and more than half of small companies that got loans say they’ve spent all the money, according to a survey by the National Federation of Independent Business.
Nearly a quarter say they’ve laid off workers or expect to do so once the funds run out.
And an extra $600 in weekly unemployment benefits provided by the federal government on top of regular aid from the states will expire this month, unless replaced or extended. Those funds, along with the $1,200 relief checks sent out in April, enabled millions of Americans to stay current on housing costs and bills.
More than 13.5 million people have been infected worldwide and more than 580,000 have died, a tally by Johns Hopkins University shows. The true numbers are thought to be far higher for a number of reasons, including limited testing.