US jobless claims decline, but layoffs remain elevated
United Airlines, American Airlines ready to furlough 32K
WASHINGTON — The number of Americans seeking unemployment benefits declined lastweek to a still-high 837,000, evidence that the economy is struggling to sustain a tentative recovery that began this summer.
TheLabor Department’s report, released Thursday, suggests companies are still cutting a historically high number of jobs, though weekly numbers have become less reliable as states have increased their efforts to root out fraudulent claims and process earlier applications that have piled up.
Overall jobless aid has shrunk in recent weeks even as roughly 25 million people rely upon it. The loss of that income is likely to weaken spending and the economy in the coming months.
A $600-a-week federal check Congress provided in last spring’s economic aid package was available to the unemployed in addition to each state’s jobless benefit. But the $600 benefit expired at the end of July. A$300 weekly benefit that President Donald Trump offered through an executive order lasted only through mid- September, although some states are still working to send out checks for that period.
A result is that Americans’ incomes and spending are declining or slowing. Total paid unemployment benefits plunged by more than half in August, according to the Commerce Department. That pulled down Americans’ incomes for the month by 2.7% — a trend that, if it continues, could weaken economic growth.
“Unless employment growth picks up, or additional (government) aid is extended, consumer spending is at risk of slowing dramatically during the second phase of the recovery,” said Gregory Daco, an economist at Oxford Economics.
Other measures of the U.S. economy have been sending mixed signals. Consumer confidence jumped in September, fueled by optimism among higher- income households, though it remains below pre-pandemic levels. Andameasure of pending home sales rose in August to a record high, lifted by ultra-low mortgage rates.
Yet some real-time measures indicate that growth has lost momentum with the viral pandemic still squeezing many employers, especially small retailers, hotels, restaurants and airlines, nearly seven months after it paralyzed the economy. An economic index compiled by the Federal Reserve Bank of New York grew in September at a weaker pace than during the summer months.
In its report on jobless claims Thursday, the Labor Department said the number of people who are continuing to receive benefits fell to 11.8 million, extending a steady decline since spring. That suggests that many of the unemployed are being recalled to their old jobs. Another 12 million people are receiving aid under thePandemic Unemployment Assistance program, which has made the self-employed and gig workers eligible for benefits for the first time.
Late Wednesday, two major airlines — American and United — announced they would begin to furlough 32,000 employees after lawmakers and the White House failed to agree on a pandemic relief package that would extend the aid to carriers.