1.9 million apply for jobless benefits
It’s evidence that many employers are still cutting jobs even as the reopening of businesses has slowed layoffs.
WASHINGTON » Nearly 1.9 million people applied for U.S. unemployment benefits last week, evidence that many employers are still cutting jobs even as the gradual reopening of businesses has slowed the pace of layoffs.
The number of people who are receiving jobless aid rose slightly to 21.5 million, down from a peak of nearly 25 million two weeks ago but still at a historically level. It shows that scattered rehiring is offsetting only some of the ongoing layoffs with the economy mired in a recession. Thursday’s weekly number from the Labor Department is still more than double the record high that prevailed before the viral outbreak.
Still, the number of people who applied for benefits last week marked the ninth straight decline since a spike in mid-March. The job market meltdown triggered by the coronavirus may have bottomed out as more companies call employees back to work.
Economists said they were disappointed, though, that the number of first-time applications for jobless aid and the total number of people receiving benefits remain so high.
“While the drop in new claims is welcome news and more evidence that the worst of the job losses are behind us, the recovery in the labor market is expected to be painfully slow,” said Gregory Daco, chief U.S. economist at Oxford Economics. “We look for a two-phase recovery, with an initial burst in rehiring followed by a much slower retracement of job losses.
Fewer people sought jobless aid last week in 47 states and in Washington, D.C., while the number rose in just California, Florida and Mississippi. The number of people receiving aid fell in 37 states and in D.C. and increased in 13 states. Applications for benefits are falling in states that had reopened their businesses early, such as Georgia and Texas, and are also declining in those that are still early in the reopening process, such as New York and Massachusetts.
In addition to the laid-off employees who applied for benefits last week, 623,000 others sought aid under a new program for selfemployed and gig workers, who qualify for benefits for the first time. These figures aren’t adjusted for seasonal variations, so the government doesn’t include them in the overall data. And 15 states still aren’t reporting the number of applicants under this program.
The figures come one day before the government’s jobs report for May is expected to show that employers slashed 8 million jobs last month and that the unemployment rate jumped from 14.7% to 19.8%. That would mean that nearly 30 million people have lost jobs since the viral outbreak intensified in March and that joblessness has reached its highest point since the Great Depression.
Since mid-March, 42.7 million people have applied for unemployment benefits, but not all of them are still unemployed. Some have been rehired. And some likely filed duplicate applications as they struggled with unresponsive state labor systems. Others were unable to file at all until recently.
“The big question is whether millions are still filing for unemployment due to separations that happened awhile ago or because of separations still happening today,” said Adam Ozimek, chief economist at Upwork. “The latter is far more problematic” because it would point to ongoing business closures and cutbacks.