Around 1,106 million people submitted actual claims last week, pushing the number back to seven figures, after two weeks of declines, according to Labor Department data.
The heightened figure calls into question the nature – and length – of the nation’s economic recovery. Economists had expected first weekly claims to fall from 963,000 to 920,000. Before the coronavirus pandemic, the average number of claims went over 200,000 a week.
Lawmakers continue to debate a coronavirus relief package that would provide additional assistance to Americans who lost their jobs when the economy shut down to stop the spread of the virus. Pandemic unemployment assistance, which provided $ 600 a week in additional benefits, expired at the end of July.
Republicans are pushing for a smaller plan, citing improved economic metrics such as last week’s surprise in unemployment claims and lower unemployment rates – which, at 10.2 percent, is still three times what it was in February, before the pandemic occupied, but lower than the peak of 14.7 percent.
“There is no question that economic numbers are doing better. “If we reopen the economy, we’ll see things get better,” Treasury Secretary Steven Mnuchin told CNBC on Tuesday. “But the president wants us to do more. He wants us to provide money for children and jobs, and a second round of the PPP and direct payments are a clear part of that. “
For many families, state benefits are simply not enough to make an end. In Mississippi and Arizona, the weekly benefit of state unemployment is below $ 240.
President Donald Trump earlier this month issued an executive order that provided $ 300 a week in additional unemployment benefits, but that assistance is limited to three weeks because it is tied to funding from the Federal Emergency Management Agency.
While the economy is expected to start growing again in the third quarter, and hiring needs to pick up, a resurgence in the virus casts doubt on any “V-shaped” recovery. Some economists now predict that it will be more of a “W” shape.
At its last monetary policy meeting, Federal Reserve officials agreed that the ongoing public health crisis would weigh heavily on long-term economic activity, employment, and inflation and pose many risks to the medium-term economic outlook. , ‘according to commission minutes released on Wednesday.
“In the coming months, food insecurity and homelessness are expected to rise to the worst levels since the Great Depression,” Grant Thornton Chief Economist Diane Swonk wrote in a note. “At the current rate, it would be good in 2021 to recover the 12.9 million jobs lost since February.”
