Northwest Arkansas Democrat-Gazette
Week’s jobless claims top 1 million
32 million in U.S. unemployed as recovery appears to slow
The number of Americans filing for unemployment barely declined last week, signaling that challenges to the economic recovery are multiplying.
Initial jobless claims in regular state programs totaled 1.3 million in the week ended July 11, down 10,000 from the previous week — the smallest decline since March, Labor Department figures showed Thursday.
Nearly 17.4 million workers were on continuing unemployment insurance for the week ending July 4, the Department of Labor said. Another 14.3 million people were claiming Pandemic Unemployment Assistance, the program newly created for self-employed or gig workers who are out of work, bringing the total number of people on all programs to 32 million unemployed.
Jobless filings exceeded 1 million for a 17th straight week, compared with an average of about 210,000 before the pandemic. Filings have steadily decreased from their high of 6.9 million filings for the week ending March 28, but the rate has slowed significantly in the past month.
The figures add to signs that the labor-market recovery is stalling as coronavirus cases surge and reopenings pause or reverse across the country. Conditions are at risk
of worsening with the potential expiration of supplemental federal jobless benefits, along with still-depressed demand in a variety of sectors: American Airlines Group Inc. and United Airlines Holdings Inc., for instance, have indicated they could lay off tens of thousands of workers later this year.
Colleges and universities in states including New Mexico, Iowa, Ohio and Arizona have begun announcing potential layoffs, furloughs and pay cuts as states begin paring down their budgets to match plunging tax revenue. Other institutions that rely on public funding appear to be pulling back as well, including libraries, historical societies
and public school systems.
The week’s unemployment claims numbers took some of the steam out of a report showing retail sales rose in June by more than forecast and reached pre-pandemic levels, underlining the importance of the federal stimulus set to run out this month.
So far, 22 states have either reversed or paused reopenings, according to Bank of America Corp. economists, with California recently shutting indoor dining statewide along with other actions.
The weak outlooks were reflected in earnings calls and other comments from major banks this week. Bank of America Chief Executive Officer Brian Moynihan told analysts Thursday that “baseline projections now extend the length of the recessionary environment into 2022, deep into 2022.”
Still, there was other positive news on the economy Thursday. A measure of consumer sentiment rose to the highest since mid-April, while optimism among home builders jumped to pre-pandemic levels as mortgage rates fell to a record low.
Federal Reserve policymakers have sounded more cautious this week. Philadelphia Fed President Patrick Harker said Wednesday that his bank is revising its economic outlook in light of the virus surge and he’s a “little skeptical” that July’s jobs gain will be as strong as the previous two months’.
The uncertainty of what comes next is being 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 Paycheck Protection Program providing small-business loans will stop taking applications Aug. 8. More than $500 billion has already been lent and more than half of small companies that got loans say they have spent all the money, according to a survey by the National Federation of Independent Business. Nearly one-quarter say they have or expect they will lay off workers 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.
“The retail sales data tell us something about how households emerged from lockdown between mid-May and the end of June, but the jobless claims data are telling us something about their ability to carry that forward into July and August against a backdrop where it’s unclear whether additional federal benefits payments are forthcoming,” said Michael Gapen, chief U.S. economist at Barclays Plc. Information for this article was contributed by Olivia Rockeman, Reade Pickert, Jordan Yadoo, Edith Moy, Sophie Caronello, Maeve Sheehey, Vince Golle and Lananh Nguyen of Bloomberg News; by Eli Rosenberg of The Washington Post; and by Christopher Rugaber, Sarah Skidmore Sell and Anne D’Innocenzio of The Associated Press.