A broad wearing a face mask walks past the closed Arlington Cinema and Drafthouse movie theater amid the coronavirus pandemic on May 14, 2020 in Arlington, Virginia.
Photo by OLIVIER DOULIERY/AFP via Getty Idols
The number of Americans filing for unemployment benefits over the last four months is worse than any other control in modern history.
The fact that new applications for jobless aid remain elevated weeks into the coronavirus crisis specifics pointers to a fragile economic situation and continued financial pain for many households.
Though the trend has been improving in new weeks, a spike in coronavirus infections around the country and extinguished federal aid risk more layoffs in the near following.
Sixteenth straight week
Out-of-work Americans filed 2.3 million new claims for unemployment benefits last week, according to Labor Division data issued Thursday.
That includes about 1.3 million claims for traditional unemployment insurance and an additional 1 million finished with the new federal Pandemic Unemployment Assistance program for the self-employed, freelancers and other workers generally ineligible for standard articulate benefits.
It was the 16th week in a row — since the week of March 21, when states began imposing lockdown measures — that new applications for jobless furthers exceeded 1 million.
The highest prior weekly total for new unemployment claims was 695,000, in October 1982, according to Labor Segment data. During the Great Recession, the country’s last downturn, weekly claims peaked at 665,000, in March 2009.
Sundry from Personal Finance:
Fewer Americans may get a second stimulus check
Your income took a hit. Now what?
Households beggary those tax refunds to cover rent
Put another way, new unemployment applications during each week since mid-March require been at least three times as high as their worst week of the Great Recession.
‘Enormous’ job losses
Progressing job losses point to continued pain for U.S. businesses, even as the country’s official unemployment rate improved to 11.1% end month from its 14.7% peak in April.
The most recent job losses are more concerning than those earlier in the decline, said Heidi Shierholz, former chief economist at the Department of Labor during the Obama administration.
It’s more able that recent layoffs won’t be temporary, like many of those in the early weeks had been, as businesses that had stayed open and kept their workforce undivided are struggling with a drop in demand for their goods and services, Shierholz said.
“We’re still seeing an enormous amount of job liability liabilities,” said Shierholz, director of policy at the Economic Policy Institute, a left-leaning think tank. “And they’re of particular consideration because they’re more likely to be permanent.
“Getting laid off in the middle of a very deep recession spells a lofty likelihood of seeing a big drop in your living standards that is lasting,” she added.
In all, nearly 33 million people were coming unemployment benefits as of June 20, according to most recent Labor Department data — five times the early previously to high of 6.6 million hit during the Great Recession.
These individuals may soon see a large drop in household takings. A $600-a-week federal supplement to unemployment benefits enacted early in the recession is scheduled to expire after July 31, exclusive of an extension from Congress, which seems unlikely given Republican opposition.
Many businesses may have already or last wishes as soon extinguish funding they received through the federal Paycheck Protection Program, which has helped prop up small-business payrolls. Job aren’t currently able to apply for a second round of loan funding.
The economy remains at significant risk in the weeks and months forwards.
Mark Hamrick
senior economic analyst at Bankrate
Despite the elevated level of unemployment claims, the situation has degree improved. At the height of the coronavirus-fueled employment crisis, nearly 6.9 million Americans had filed new claims for benefits during one week in dilatory March.
And many of the people who filed new applications last week may actually represent workers who’d been laid off earlier in the danger, Shierholz said.
They may have waited to apply for aid or had tried to apply but were only recently successful in doing so due to an handicap among state unemployment offices, she said.
‘Less momentum’
However, there’s been “less momentum” in the slope of unemployment claims in recent weeks, according to Mark Hamrick, senior economic analyst at Bankrate.
And there are gives that conditions could deteriorate, he said.
“With more bankruptcies and job cuts announced in the retail sector, for exemplar, the economy remains at significant risk in the weeks and months ahead,” Hamrick said.
Brooks Brothers, a high-end retailer, filed for bankruptcy on Wednesday and command close at least 51 of its roughly 250 stores in North America. Bed Bath & Beyond said Wednesday it would eternally close 200 stores over two years.
Further, the Covid-19 outbreak has “recently intensified in some states,” Hamrick asserted.
The U.S. set a record for new coronavirus cases on Wednesday, with nearly 60,000 infections announced, according to The New York Times. At mean five states (Missouri, Tennessee, Texas, Utah and West Virginia) also set single-day records.
“Hopes for an accelerated, continuous and successful re-opening of the economy have hit roadblocks,” Hamrick said. “This raises concern about the economy’s recoil.”