Another 884,000 Americans filed for unemployment aid last week

 Unemployment claims held steady at 884,000 last week, a sign the labor-market recovery is losing steam six months after the pandemic struck the U.S.

Claims have fallen from a March peak of about 7 million, but remain at historically high levels—above the pre-pandemic record of 695,000.

The number of workers collecting state unemployment benefits has also dropped from highs reached earlier in the pandemic. So-called continuing claims decreased by 1.24 million to about 13.3 million for the week ended Aug. 22.

The total number of workers receiving assistance from state and federal programs remained high in mid-August. The total of about 29 million people, which isn’t seasonally adjusted and lags two weeks behind new state claims figures, includes temporary federal pandemic-related programs for self-employed and gig workers along with those receiving regular state benefits.

“There’s still a long way to go, and I think we’re likely to see continued progress,” said Stephen Stanley, chief economist at Amherst Pierpont. “More businesses are still reopening.”

The unemployment rate fell to 8.4% in August from 10.2% in July and a peak of near 15% in April, when the pandemic triggered widespread business closures.

State reopenings helped boost employment this summer, and gains continued in August, but at a slower pace, Friday’s Labor Department report said.

The bulk of the decline in jobless claims at the end of August reflected a change in how the Labor Department calculated seasonal adjustments, economists said. The agency’s methodology change, which will be applied to claims figures going forward, is intended to better align the adjusted figures with raw numbers distorted by the pandemic.

The changes don’t, however, affect the overall labor-market picture: The pandemic caused layoffs to surge to historically high levels, followed by a partial rebound that continued through the summer. Still, unemployment is likely to remain near levels seen in previous recessions in the near term.

The increase in the number of job postings, a real-time measure of labor-market activity, has markedly slowed since late July, and last week stood about 20% below 2019 levels, according to data from job-search site

Some companies that reopened in late spring and early summer rehired a fraction of their furloughed workers, but aren’t seeing enough foot traffic or new orders to raise employment to pre-crisis levels.

Marty Cunningham laid off all six part-time employees at his Springfield, Mass., bar at the onset of the pandemic this spring. He brought back three employees when the neighborhood bar reopened in June and hopes to see business increase enough to hire back more workers.

“It seems like it is incrementally getting a little better,” he said of business demand, noting he wasn’t seeing a fast recovery.

Sales have been running at about half of last year’s levels, as individuals—especially elderly ones—remain hesitant to go out amid the pandemic, Mr. Cunningham said.

Jobless claims are nearly four times levels seen before the coronavirus upended the economy in March, an indication companies continue to cut workers.

“The fact that people are still losing jobs this late after the start of the pandemic is really distressing,” said Lowell Taylor, an economics professor at Carnegie Mellon University’s Heinz College.

At the beginning of the pandemic, Congress passed a bill that included federal funding for an extra $600 a week in unemployment benefits. Those benefits expired at the end of July, and last month, President Trump signed an executive action allowing states to tap disaster-relief funds for $300 a week in enhanced aid on top of regular state benefits.

More than 40 states have received federal approval to distribute the extra payments, according to the Federal Emergency Management Agency. Some states, including Arizona and Louisiana, have already started delivering the money to individuals.

The money to fund the extra payments is limited and could be exhausted in five or six weeks, depending on the number who qualify for such funds.

On Tuesday, Senate Republicans proposed a new, smaller package of coronavirus aid, as talks between the White House and Democrats over a larger coronavirus relief bill remained at a standstill.

The new GOP proposal includes $300 in weekly federal unemployment insurance through Dec. 27.

Post a Comment

Previous Post Next Post