1.2 million more seek jobless aid

WASHINGTON — Nearly 1.2 million laid-off Americans applied for state unemployment benefits last week, evidence the coronavirus keeps forcing companies to slash jobs just as a critical $600 weekly federal jobless payment has expired.

The government’s report Thursday did offer a smidgen of hopeful news: The number of jobless claims declined by 249,000 from the previous week, after rising for two straight weeks, and it was the lowest total since mid-March.

Still, claims remain at alarmingly high levels. It is the 20th straight week that at least 1 million have sought jobless aid.

Before the pandemic hit hard in March, the number of Americans seeking unemployment checks had never surpassed 700,000 in a week, not even during the Great Recession of 2007-09.

Rubeela Farooqi, chief U.S. economist at High Frequency Economics, called the drop in weekly claims “a move in the right direction.”

But in a research note, she added: “Repeated shutdowns for virus containment remain a threat to the labor market, which is already weak. The possibility of mounting layoffs that could become permanent is high. Without effective virus containment, the recovery remains at risk from ongoing job losses that could further restrain incomes and spending.”

The pandemic, the lockdowns meant to contain it and the wariness of many to venture back out to eat, shop or travel have delivered a devastating blow to the economy despite emergency rescue efforts.

The nation’s gross domestic product, the broadest measure of economic output, shrank at an annual rate of nearly 33% from April through June. It was by far the worst quarterly fall on record, though the economy has rebounded somewhat.

All told, 16.1 million people are collecting traditional unemployment benefits from their state. The unemployed had also been receiving the $600 a week in federal jobless aid on top of their state benefit.