WASHINGTON (AP) – The number of laid-off workers seeking unemployment benefits held steady at 1.3 million last week, a historically high level indicating that many companies are still cutting jobs as the viral outbreak intensifies.
The high level of claims for unemployment assistance is occurring as new confirmed cases of coronavirus are largely increasing in the solar belt, threatening to weaken the economic recovery. Case counts are increasing in 40 states and 22 states have slowed or reversed their efforts to reopen their economies, according to Bank of America.
The growing infections paralleled the growing requests for help in some states that were affected at this time, and fell in states with fewer infections. In Florida, claims doubled to 129,000, and in Georgia they increased nearly a third to 136,000. In California they increased 23,000 to almost 288,000. Applications also increased in Arizona and South Carolina.
Requests fell in Texas, New Jersey, and New York.
Thursday’s report from the Labor Department showed that unemployment aid applications fell by around 10,000 from the previous week. The figure has now topped a million for 17 consecutive weeks. Before the pandemic, the record for weekly jobless claims was nearly 700,000.
Those figures are adjusted for seasonal variations, a practice that aims to filter out trends that are not reflected in the economy, such as the layoff of seasonal workers after the winter break. However, the impact of the coronavirus has made such adjustments less relevant, economists say, because the claims are well above normal levels.
Before seasonal adjustment, applications actually increased 100,000 to 1.5 million, a sign that layoffs are getting worse.
The total number of people receiving unemployment benefits fell 400,000 to 17.3 million, the government said. That suggests that some companies continue to rehire workers, which could offset some of the job losses reflected in the still high level of claims.
Another 928,000 people sought benefits last week under a separate program for freelancers and workers that made them eligible for aid for the first time. These figures are not adjusted for seasonal variations, so the government does not include them in the official count.
The resurgence of the virus and the closure of new businesses in states like Florida and California, along with signs that consumers are pulling out of eating out and other activities, have fueled fears that the economic recovery is losing steam.
The government employment report for June showed a solid gain of 4.8 million jobs and an unemployment rate that fell to 11.1% from 13.3%.
But economists increasingly doubt that this pace can be sustained. The number of employees working in small businesses declined last week, particularly in states with increasingly severe viral outbreaks, according to data from Homebase, a company that makes job-tracking and scheduling software.
“The risk of a downturn in the economy has increased as more states adopt policies to combat the spread of the virus,” Bank of America economists said in a research note. “Until the country manages to control the virus, the recovery is likely to be adequate.”
Companies continue to lay off people. American Airlines warned its workers On Wednesday, you may have to cut up to 25,000 jobs in October due to the sharp reduction in air travel. Airlines have been banned from firing until then as a condition of federal aid they have received. United Airlines has already said 36,000 workers can lose their jobs.
Air traffic began to recover slowly in mid-April, but like other parts of the economy, the improvement stabilized in July as the viral outbreak worsens.
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