About 1.4 million people applied for unemployment benefits for the first time last week, according to new Labor Department data, marking the first week in nearly four months that the number has increased.
A resurgence in the number of coronavirus infections, including a record increase in California, has led many authorities to curtail the reopening of some businesses and restaurants, leaving more Americans out of work.
After reaching a peak of 6.9 million jobless claims for the first time in late March, the weekly number continued to decline, albeit very slowly, as fiscal stimulus and Federal Reserve emergency actions have supported the economy. Last week’s data reverses that downward trend.
“This is clearly very disappointing news,” said Mark Hamrick, senior economic analyst at Bankrate.com. “The increase marks the end of the series of new 15-week declining claims. The persistence of new high unemployment claims shows the cost the virus continues to have on the economy.”
The closure or pause of some companies at coronavirus “hotspots” occurs at the same time as government support expires, such as the Payroll Protection Program loan, which provided the much-needed cash flow to support Workers on the payroll while companies were closed to prevent the spread of the virus.
Lawmakers are rushing to finalize a new coronavirus relief package to support workers and boost the economy in crisis. Senate Republicans announced Wednesday night that they have “reached a fundamental agreement” with White House negotiators on how to move forward with the new bill.
One of the most controversial issues is the federal payment of $ 600 per week for unemployed Americans, which will be exhausted at the end of the month.
Data on Thursday’s unemployment claims indicate that the need for financial assistance is unlikely to dissipate anytime soon, with more than 16 million people applying for ongoing unemployment benefits.
Economists have said they hope the job market will not recover from the coronavirus pandemic for years, as companies face a financial calculation and workers are forced to retrain in other skills.
“There will be a large portion, among millions, of people who will not be able to return to their old jobs, and there may not be a job in that industry for them for some time,” said Federal Reserve Chairman Jerome Powell. he said in June.
