US, Ohio jobless claims stay high

The number of laid-off workers filing new claims for unemployment benefits remained stuck at 1.3 million last week, a historically high level that indicates that many companies are still cutting jobs as the coronavirus outbreak intensifies.

The story was similiar in Ohio, where 35,422 claims were filed. That’s about the same number as has been filed every week in Ohio since the end of May and about five times the number filed before COVID-19 struck hard in March.

The elevated level of applications for jobless aid is occurring as new, confirmed cases of the coronavirus have jumped in Ohio and across much of the Sunbelt, threatening to weaken the economic recovery. Case counts are rising in 40 states, and 22 have either paused or reversed their efforts to reopen their economies, according to Bank of America.

The U.S. Labor Department’s jobless-claims report on Thursday showed that applications fell by about 10,000 from the previous week. The total has topped 1 million for 17 straight weeks. Before the pandemic, the record high for weekly unemployment applications was nearly 700,000.

Those figures are adjusted for seasonal variations, a practice that is intended to filter out trends that don’t reflect on the economy, such as the layoff of seasonal workers after the winter holidays. Yet the impact of the coronavirus pandemic has made such adjustments less relevant, economists say, because claims are so far above normal levels.

Before the seasonal adjustment, applications actually rose 100,000, to 1.5 million, a sign that layoffs are actually worsening.

The total number of people who are receiving jobless benefits dropped 400,000, to 17.3 million, the government said. That suggests that some companies continue to rehire workers, which could offset some of the job losses reflected in the still-high level of claims.

An additional 928,000 people sought benefits last week under a separate program for self-employed and gig workers that has made them eligible for aid for the first time. These figures aren’t adjusted for seasonal variations, so the government doesn’t include them in the official count.

Ohio has distributed $5.2 billion in unemployment benefits to more than 747,000 residents over the past four months. The state also has distributed more than $4.1 billion in benefits to those under the separate program for self-employed and gig workers.

The resurgence of the virus and new business shutdowns in states such as Florida and California, along with signs that consumers are pulling back from dining out and other activities, has intensified fears that the economic recovery is losing steam.

The government’s employment report for June showed a solid gain of 4.8 million jobs and an unemployment rate that fell to 11.1% from 13.3%.

But economists increasingly doubt that such a pace can be sustained. The number of employees working at small businesses declined last week, particularly in states with worsening viral outbreaks, according to data from Homebase, a company that makes scheduling and work-tracking software.

“The risk of a dip lower in the economy has increased as more states adopt policies to combat the virus spread,” economists at Bank of America said in a research note. “Until the country manages to get the virus under control, the recovery is likely to be one of fits and starts.”

Dispatch Reporter Mark Williams contributed to this story.