Rise in unemployment claims still reflects wrestling of the US economy

WASHINGTON (AP) – The coronavirus recession hit fast and violently. Now, with the U.S. economy still five months later in the grip of the outbreak, the recovery looks fit and uneven – and painfully slow.

The latest evidence came Thursday, when the government reported that the number of workers applying for unemployment last week climbed to more than 1 million after two weeks of decline.

The figures suggest that employers are still leaving jobs, even if some companies reopen and some sectors such as housing and manufacturing are restored.

“Looking at the virus dictates if there will be relief from this economic nightmare, and it does not look like it will soon,” said AnnElizabeth Konkel, an economist at India, a website with ads.

The virus in the US has killed more than 170,000 people and caused more than 5.5 million confirmed infections, with deaths averaging more than 1,000 per day. Worldwide, the death toll stands at about 790,000, with more than 22 million cases.

Overall, the number of laid-off U.S. workers collecting unemployment benefits fell from 15.5 million to 14.8 million last week. Many of them probably found jobs. But some may have used all of their benefits, which persist in most states after about six months.

In the previous weekly report of the Labor Department, new unemployment claims fell below 1 million to 971,000 for the first time since March. But that trend reversed itself this time.

Many businesses and consumers remain paralyzed by uncertainty and limited by lockdowns, and labor gains appear to be slowing down from the rapid bounce-backs of May and June, when millions of restaurant and retail workers were recruited. The number of job postings posted on India fell last week for the first time since April.

Twenty million jobs were lost to the outbreak in March and April, and in the past three months, 9.3 million have been returned.

Until the virus can be brought under control, economists agree, any recovery is meant to remain weak.

Kronos, a company that makes time-tracking software for small businesses, said the number of shifts worked by its clients is barely growing after gradually increasing over the past three months. Working hours are stuck at about 10% below their pre-pandemic level.

“It’s becoming increasingly clear that the last 10% of recovery will be the most challenging,” said Dave Gilbertson, a vice president at Kronos.

At the same time, those who suffer unemployment are now receiving much less support because a federal benefit of $ 600 per week has expired, which means they only have to get benefits due to the much smaller benefits of their states. This has deepened the struggle for many and put some at risk of expulsion.

President Donald Trump has signed an executive order to offer $ 300 per week in federal unemployment assistance. Twenty-five states have so far said they will issue it, though they will need to upgrade their computer systems, and it could take a few weeks for the money to start streaming to recipients.

While home construction and sales have jumped back along with car purchases, spending on travel, entertainment and many other services is still weak. Small businesses have trouble. And unemployment, at 10.2%, remains high.

More Americans eat in restaurants, but the level of sedentary dining is still 54% below pre-pandemic levels, according to OpenTable.

Daniel Zhao, an economist at Glassdoor, an employment website, said the companies with the largest increase in job openings are healthcare and e-commerce and delivery services. But those gains mainly reflect responses to the outbreak rather than economic growth.

Thursday’s report found that in addition to people applying for state benefits last week, some 540,000 others sought help under a new program that included self-employed and gig workers for the first time. That figure is not adjusted for seasonal variations, so it is reported separately.

Including the self-employed and gig workers, the number of people brings to 28 million the number of people receiving some form of unemployment assistance, although that figure could double in two states. That figure has not changed much from a week earlier.

State benefits of unemployment average about $ 308 per week. In some states, the benefits are much smaller. Louisiana pays the nation’s lowest unemployment benefit: $ 183. Mississippi is the next-lowest, at $ 187. The highest average is in Hawaii, at $ 456, followed by North Dakota and Massachusetts at $ 426.

For John Williams, a former cab driver in Slidell, Louisiana, just outside New Orleans, the loss of the $ 600 in federal benefits landed him in a food bank line this week, waiting for groceries. He is currently receiving just $ 107 in state unemployment assistance, which is all he qualifies for based on his previous income.

Before the virus dried up most of his business, Williams, 77, used rates at New Orleans airport. Now, in addition to his unemployed help, he receives about $ 300 a month from Social Security and a small pension from a previous job as a maintenance worker in the city’s school system. He can barely cover his mortgage.

Williams went two days without taking his blood pressure medication, because when he went to fill it up, the costs doubled.

“I hang in there, do the best I can,” he said.


AP writer Rebecca Santana contributed to this New Orleans report.