USA TODAY International Edition
Jobless claims down but remain high at 1.2 million
Amid virus spikes, total above 55M
Over 55 million have sought unemployment benefits since shutdown began.
Four months after the COVID- 19 pandemic largely shut down the economy and left millions of Americans out of work, employers continue to lay off workers at a historic pace.
About 1.2 million people last week filed initial applications for unemployment insurance – a rough measure of layoffs – the Labor Department said Thursday, down substantially from 1.4 million the previous week and the lowest level since March.
Economists surveyed by Bloomberg estimated that 1.41 million workers sought benefits.
The big drop follows two weeks of increases in claims as coronavirus surges in the South and West led more than 20 states to halt or roll back the reopening of restaurants, bars, gyms, movie theaters and other outlets.
Previously, claims totals had declined during a 15- week stretch that included the reopening of businesses in many states.
“The story here, we think, is that layoffs triggered by the second wave of COVID- 19 in the South and West are now falling,” Ian Shepherdson, chief economist of Pantheon Macroeconomics, wrote in a research note.
Yet last week’s total is still historically large. Besides the states backtracking on reopening, many firms have exhausted the forgivable federal loans they received for retaining or rehiring staffers, prompting struggling firms to let some workers go again.
More than 55 million Americans have
sought jobless benefits since state shutdowns began in mid- March.
Before the coronavirus crisis, the previous all- time high for weekly initial claims was 695,000 during a recession in 1982.
Continuing unemployment claims, which represent all Americans still receiving benefits with a one- week lag, also fell sharply, to 16.1 million from about 17 million the previous week.
That number also has been generally trending downward but remains elevated and is becoming more significant because it reflects all those still unemployed while also accounting for people who have returned to work.
Continuing claims have been volatile because states such as California and
Florida require the unemployed to file for benefits every two weeks.
Excluding those states, continuing claims fell by just 230,000, according to an analysis by Shepherdson.
The report comes as jobless workers face the recent expiration of a $ 600 federal supplement to state unemployment benefits and Congress remains at an impasse over whether to extend it and at what level.
The loss of that bonus may be discouraging some idled workers from filing initial claims, contributing to last week’s sharp fall, Contingent Macro Research wrote in a note to clients.
Last week, initial claims fell by about 17,000 in Florida and Virginia, 16,000 in California, 15,000 in Texas and 12,000 in New Jersey.
An additional 656,000 people filed initial claims under a separate program that expands eligibility to the self- employed and independent contractors, among others, during the crisis.
About 13 million Americans were already receiving unemployment checks under that program, known as Pandemic Unemployment Assistance.
The most recent totals will figure into the August employment report.
Economists on average expect the July report, out Friday, to show 1.5 million job gains – including hiring and layoffs – but there’s wide disparity in the forecasts, with some experts predicting job losses and others reckoning that payrolls held steady.
The total is likely to mark a slowdown from the 2.7 million payroll increases in May and 4.8 million in June, a surge that recouped about a third of the 22 million jobs the economy shed the prior two months.
Other measures of economic activity also point to a pullback.
The number of open small businesses at the end of July was roughly unchanged compared with the beginning of the month, according to Homebase, which makes scheduling software.
And a Census Bureau “household pulse” survey indicates there were nearly seven million fewer jobs between the June and July employment report surveys, Capital Economics wrote in a research notes.
It adds, however, that the pulse data isn’t seasonally adjusted and may not account for large drops in employment at schools at the start of the summer.
Before the coronavirus crisis, the previous all- time high for weekly initial claims was 695,000 during a recession in 1982.