Despite reopenings, virus-related layoffs in US hit nearly 39 million
More recent layoffs could persist longer
WASHINGTON — The number of Americans applying for unemployment benefits in the two months since the coronavirus took hold in the U.S. has swelled to nearly 39 million, the government reported Thursday, even as states from coast to coast gradually reopen their economies and let people go back to work.
More than 2.4 million people filed for unemployment last week in the latest wave of layoffs from the business shutdowns that have brought the economy to its knees, the Labor Department said.
That brings the running total to a staggering 38.6 million, a job market collapse unprecedented in its speed.
The number of weekly applications has slowed for seven straight weeks. Yet the figures remain 10 times higher than normal before the crisis struck.
It shows that even though all states have begun reopening over the past three weeks, employment has yet to snap back, and the outbreak is still damaging businesses and destroying jobs.
“While the steady decline in claims is good news, the labor market is still in terrible shape,” said Gus Faucher, chief economist at PNC Financial.
Federal Reserve Chairman Jerome Powell said over the weekend that U.S. unemployment could peak in May or June at 20% to 25%, a level last seen during the Great Depression almost 90 years ago. Unemployment in April stood at 14.7%, a figure also unmatched since the 1930s.
Over 5 million people worldwide have been confirmed infected by the virus and about 330,000 deaths have been recorded, including about 94,000 in the U.S. and around 165,000 in Europe, according to a tally kept by Johns Hopkins University and based on government data. Experts believe the true toll is significantly higher.
In other developments: — President Donald Trump’s approval ratings have remained steady amid the crisis, underscoring the way Americans seem to have made up their minds about him. A poll from The Associated Press-NORC Center for Public Affairs Research says 41% approve of his job performance, while 58% disapprove. That’s consistent with opinions of him throughout his three years in office.
Across the U.S., some companies have begun to rehire laid-off employees as states have eased restrictions on movement and commerce. On Monday, more than 130,000 workers at the three major American automakers, plus Toyota and Honda, returned to their factories.
Still, major employers continue to cut jobs. Uber said this week that it will lay off 3,000 more employees because demand for rides has plummeted.
Stephen Stanley, chief economist at Amherst Pierpont, said the latest layoffs may be particularly worrisome because they are happening even as states reopen. That could mean many companies see little hope of a substantial economic recovery soon and still feel a need to cut jobs.
“There’s a high probability that those layoffs could persist for longer than those that were a function of (businesses) just being closed,” Stanley said.
The latest figures do not mean 38.6 million people are out of work. Some have been called back and others have new jobs. But the vast majority are still unemployed.
An additional 1.2 million people applied for unemployment benefits last week under a federal program that makes self-employed, contractor and gig workers eligible for the first time.