Job market’s modest bump may be stalling

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 snap-back in the second half of the year, though not enough to reverse all the damage.

Last week, the number of people applying for jobless benefits declined slightly to 1.48 million. It was the 12th straight weekly drop. An additional 700,000 people applied through a 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.

A separate government report Thursday said orders for durable goods unexpectedly jumped nearly 16% in May, reflecting a rebound in some business activity. Still, the pace of orders and shipments remains far below pre-pandemic levels. And excluding the volatile transportation category, so-called core orders rose only modestly, reflecting still-sluggish business investment.

The virus is once again squeezing companies across the economy.