San Francisco Chronicle Late Edition

Job­less fil­ings climb again as econ­omy slows

- By Ben Cas­sel­man Business · Unemployment · Finance · U.S. News · Infectious Diseases · Employment · Society · Health Conditions · United States of America · Chicago · Los Angeles County · Los Angeles · Philadelphia · Mill Valley, CA · United States Department of Commerce · Congress of the United States · Republican Party (United States) · Democratic Party (United States) · Joe Biden · Nancy Pelosi · Mitch McConnell · Donald Trump · United States Department of Labor

Lay­offs are ris­ing again and Amer­i­cans’ in­comes are fall­ing, the lat­est signs that the one­two punch of a resur­gent pan­demic and wan­ing govern­ment aid are un­der­min­ing the U.S. eco­nomic re­cov­ery.

Ap­pli­ca­tions for state job­less ben­e­fits rose for the se­cond straight week last week, the La­bor Depart­ment said Wed­nes­day. Un­em­ploy­ment fil­ings are up by more than 100,000 from the first week of Novem­ber, when they hit their low­est level since last spring, the start of the pan­demic.

Fore­cast­ers have been warn­ing for weeks that the in­crease in coron­avirus cases could have dire eco­nomic con­se­quences as con­sumers pull back on spend­ing and cities and states reim­pose re­stric­tions on busi­nesses and so­cial gath­er­ings. But while job gains and

other mark­ers of progress have slowed since the sum­mer, the re­cov­ery had proved sur­pris­ingly re­silient.

Now cracks are be­gin­ning to ap­pear. Job­less claims, not ad­justed for sea­sonal pat­terns, jumped by 78,000 last week to nearly 828,000 — a big change fol­low­ing an in­crease of 18,000 the week be­fore. It was the first time that fil­ings had risen for two straight weeks since early Septem­ber and was the largest two­week in­crease since April. Mea­sures of con­sumer con­fi­dence fell sharply in Novem­ber, and data from pri­vate sources show the la­bor mar­ket slow­ing fur­ther or go­ing into re­verse.

Any re­ver­sal would be dis­ap­point­ing af­ter months of eco­nomic progress. But it would hardly be sur­pris­ing given the new wave of lock­downs and busi­ness re­stric­tions that made fur­ther lay­offs all but in­evitable. In re­cent weeks, Chicago has im­posed a new stay­at­home order, Los An­ge­les County has sus­pended out­door din­ing and Philadel­phia has banned most in­door pri­vate gath­er­ings. Sev­eral states have ended or restricted in­door din­ing. And even where of­fi­cials have en­acted no new rules, many peo­ple are ex­pected to re­strict their ac­tiv­ity vol­un­tar­ily to avoid con­tract­ing the virus.

“The most ob­vi­ous cul­prit for ris­ing claims is the surg­ing pan­demic,” said Daniel Zhao, se­nior econ­o­mist for Mill Val­ley ca­reer site Glass­door. “It seems like it was only a mat­ter of time be­fore it started to show up in the eco­nomic data.”

The lat­est data is not uni­ver­sally bleak. The Com­merce Depart­ment re­ported Wed­nes­day that or­ders for bigticket goods like ma­chin­ery, a mea­sure of busi­ness con­fi­dence, rose in October. Newhome sales also jumped, as rock­bot­tom in­ter­est rates con­tinue to lift the hous­ing mar­ket. House­holds have $1 tril­lion more in sav­ings than be­fore the pan­demic, money that could fuel con­sumer spend­ing when vac­cines be­come widely avail­able and the threat of the virus fades. And the stock mar­ket, that highly im­per­fect barom­e­ter of the econ­omy, has set new highs.

But for the peo­ple and in­dus­tries most ex­posed, the outlook is bleak. In ad­di­tion to the new round of busi­ness re­stric­tions, a new wave of school clos­ings could push par­ents — and par­tic­u­larly moth­ers — back out of the work­force. A grow­ing num­ber of econ­o­mists are fore­cast­ing a dou­ble­dip re­ces­sion, in which eco­nomic ac­tiv­ity con­tracts again early next year.

Un­like in the spring, fam­i­lies and busi­nesses will have to weather the lat­est shut­downs largely on their own. Fed­eral pro­grams that pro­vided tril­lions of dol­lars of sup­port to small busi­nesses and un­em­ployed work­ers ex­pired over the sum­mer, and ef­forts to re­vive them have stalled in Congress. Many of the re­main­ing pro­grams run out at the end of the year.

Data re­leased by the Com­merce Depart­ment on Wed­nes­day showed that per­sonal in­come fell 0.7% in October as de­clines in govern­ment aid off­set wage and salary gains. Con­sumer spend­ing rose 0.5%, the small­est in­crease since the re­cov­ery be­gan last spring.

“Part of the rea­son the re­cov­ery has done so well is be­cause there was so much as­sis­tance for af­fected busi­nesses and work­ers, and this is just re­ally not the time to snatch de­feat from the jaws of vic­tory,” said Ju­lia Pol­lak, a la­bor econ­o­mist at ZipRe­cruiter. More aid, she said, is nec­es­sary to “pre­vent this tem­po­rary dis­rup­tion from be­com­ing permanent de­struc­tion.”

Demo­cratic and Repub­li­can lead­ers have both said they want to pass a re­lief pack­age be­fore the end of the year. But the two sides re­main far apart, and prospects for a quick deal ap­pear dim.

Con­gres­sional aides and out­side groups that have been mon­i­tor­ing the stim­u­lus talks said this week that they did not ex­pect ris­ing un­em­ploy­ment claims to prompt Se­nate Repub­li­cans to agree to any­thing close to the $2 tril­lion pack­age that Democrats have wanted for months.

Aides to Pres­i­dent­elect Joe Bi­den are plan­ning for the pos­si­bil­ity of an­other con­trac­tion in the econ­omy and have called on law­mak­ers to ap­prove a stim­u­lus deal be­fore his in­au­gu­ra­tion in Jan­uary. A small group of House Democrats have pres­sured Speaker Nancy Pelosi to ac­cept a smaller deal in order to reach a com­pro­mise with Sen. Mitch McCon­nell, R­Ky., the ma­jor­ity leader.

The stakes are par­tic­u­larly high for the nearly 14 mil­lion Amer­i­cans re­ceiv­ing un­em­ploy­ment ben­e­fits through a pair of emergency pro­grams that are set to ex­pire next month.

The data re­leased Wed­nes­day showed that in early Novem­ber, roughly 9 mil­lion peo­ple were en­rolled in the Pan­demic Un­em­ploy­ment As­sis­tance pro­gram, which cov­ers free­lancers, self­em­ployed work­ers and others who don’t qual­ify for reg­u­lar state ben­e­fits. That pro­gram has been plagued by fraud and dou­ble­count­ing, and many econ­o­mists be­lieve that the La­bor Depart­ment’s count in­flates the true to­tal. Still, by any mea­sure, there are mil­lions of peo­ple en­rolled in the pro­gram who will lose their ben­e­fits when it ex­pires.

An ad­di­tional 4.5 mil­lion peo­ple are re­ceiv­ing pay­ments through the Pan­demic Emergency Un­em­ploy­ment Com­pen­sa­tion pro­gram, which adds 13 weeks of ben­e­fits to the 26 weeks avail­able in most states. En­roll­ment in it has been ris­ing rapidly as more peo­ple reach the end of their reg­u­lar state ben­e­fits.

Some of those peo­ple will qual­ify for a sep­a­rate fed­eral ex­tended ben­e­fits pro­gram that ex­isted be­fore the pan­demic. But that pro­gram isn’t avail­able in ev­ery state.

For work­ers, the tim­ing could scarcely be worse.

“We’re go­ing to be in the heart of win­ter, virus cases are likely to be through the roof, and the hol­i­day hir­ing sea­son is over,” said An­nEl­iz­a­beth Konkel, an econ­o­mist at the ca­reer site In­deed. “It puts those who are po­ten­tially rolling off of those ben­e­fit pro­grams in a re­ally pre­car­i­ous si­t­u­a­tion.”

Adding to the risk: Fed­eral rules to block evic­tions and al­low bor­row­ers to de­fer pay­ments on home mort­gages and stu­dent loans also ex­pire at the end of the year. The Trump ad­min­is­tra­tion could choose to ex­tend them, but if it doesn’t, fam­i­lies could lose their only source of in­come and lose the pro­tec­tions keep­ing them in their homes.

“It’s sort of like run­ning into a gi­ant brick wall,” said El­iz­a­beth Pan­cotti, a pol­icy re­searcher who co­wrote a re­cent re­port on the ben­e­fits cliff. “Not that there’s a good time for all these pro­grams to end, but maybe all on the same day wasn’t a great idea.”

 ?? James Es­trin / New York Times ?? Food is dis­trib­uted out­side a Man­hat­tan church this month. The need for as­sis­tance is grow­ing.
James Es­trin / New York Times Food is dis­trib­uted out­side a Man­hat­tan church this month. The need for as­sis­tance is grow­ing.
 ?? Jenn Ack­er­man / New York Times ?? Peo­ple get tested for the coron­avirus in North Dakota. Ris­ing case rates are im­per­il­ing the eco­nomic re­cov­ery.
Jenn Ack­er­man / New York Times Peo­ple get tested for the coron­avirus in North Dakota. Ris­ing case rates are im­per­il­ing the eco­nomic re­cov­ery.

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