Jobless claims spotlight damage from virus

WASHINGTON » The number of laid-off workers seeking U.S. unemployment aid barely fell last week, and the reopening of small businesses has leveled off — evidence that the job market’s gains may have stalled just as a surge in coronavirus cases is endangering an economic recovery.

The government also reported Thursday that the economy contracted at a 5% annual rate in the first three months of the year, a further sign of the damage being inflicted by the viral pandemic. The economy is expected to shrink at a roughly 30% rate in the current quarter. That would be the worst quarterly contraction, by far, since record-keeping began in 1948. Economists do expect a snapback in the second half of the year, though not enough to reverse all the damage.

The number of laid-off workers who applied for unemployment benefits declined slightly to 1.48 million last week. It was the 12th straight drop. Still, an additional 700,000 people applied for benefits under a new program for self-employed and gig workers that 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.

Combining those figures, overall applications for jobless aid have edged down just 3% in the past two weeks — a much slower pace than in late April and May.

“There has been no real decline in weekly claims the past two weeks,” said Julia Pollak, a labor economist at ZipRecruiter. “There has also been no real increase in job openings. What seemed like encouraging signs of recovery in May largely stalled in June.”

A separate government report Thursday said orders for durable goods unexpectedly