WASHINGTON (AP) – Just over 1 million Americans applied for unemployment benefits last week, a sign that the outbreak of the coronavirus continues to threaten jobs, as well as the housing market, car sales and other segments of the economy recover from a spring collapse .
The Labor Department reported Thursday that the number of people seeking unemployment assistance last week rose from 98,000 to 1.1 million the week before.
The number of initial claims has exceeded 1 million every week, but one since the end of March, an unknown region. Before the coronavirus pandemic, they had never raised 700,000 in a week.
“Disruptions continue due to disruptions in virus-limiting activity that are likely to result in permanent closures and job losses,” Rubeela Farooqi, chief economist at High Frequency Economics, wrote in an investigation report.
Farooqi added that “the risk of permanent damage to the labor market remains high, which will slow down the pace of recovery. The return to pre-pandemic levels of prosperity is being instituted as an uncertain and lengthy process.”
More than 14.5 million people are collecting traditional unemployment benefits – up from 1.7 million a year ago – a sign that many American families depend on unemployment benefits to keep them afloat.
Until July 31, the unemployed received an additional $ 600 a week in federal money on top of regular benefits for stateless unemployment, part of an extraordinary rescue line extended to help them through the crisis. The loss of that money puts many families in a quandary.
“My income is basically cut in half,” said Taylor Love, 34, an unemployed massage therapist in Austin, Texas. “Paying our mortgage is becoming a struggle. We will have to dip into whatever small savings we have. “
After passing a massive financial rescue package in March, Congress Republicans and Democrats have not agreed on more help. On August 8, President Donald Trump signed an executive order offering an elusive version of the extended unemployment benefits. At least 39 states have accepted or said they would apply for federal subsidies that could increase their weekly benefits by $ 300 or $ 400.
Last week, nearly 608,000 people applied for jobs under a new program that extends qualifications for the first time to the self-employed and gig workers, up from 525,000 the previous week. That figure is not adjusted for seasonal trends, so it is reported separately.
Altogether, the Labor Department said 27 million people receive some form of unemployment benefits, although the figure could be inflated by double counting by states.
The pandemic has had a devastating impact on the US economy. Businesses closed and Americans stayed home to prevent infection. Economic activity declined. From April to June, gross domestic product – the broadest measure of economic output – shrank at an annual rate of 31.7%, by far the lowest quarter on record. Employers cut more than 22 million jobs in March and April.
Since then, the labor market and economy have recovered as businesses have slowly reopened. House sales and prices have been strong. Employers lost nearly 9.3 million jobs in May, June and July in May – but that hiring replacement replaced just 42% of the jobs lost in March and April.
A summer resurgence in cases in the South and West forced many businesses to close again in July. The data company Womply reports that company closures have mostly stabilized over the past four weeks. Still, 70% of bars in Texas and 71% of health and beauty stores in California were closed by mid-August, Womply found.
Economists also worry that without a government of origin, the recovery of the economy will disappear. “I really want Congress to come up with a package of benefits,” said Jacob Hanson, an unemployed temporary worker in Seattle. “Everyone needs a hand now. The situation is quite ridiculous. ”
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AP writer Geoff Mulvihill in Trenton, New Jersey, contributed to this story.
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