The labor market is showing signs of easing, even as a move by President Trump to replace lost unemployment benefits is struggling to get off the ground.
The Department of Labor announced Thursday that new claims about state unemployment jumped to 1.1 million last week, a sign that some employers continue to fire workers in the face of the coronavirus pandemic, while others remain unsustainable.
“It certainly suggests that momentum in the recovery period is slower,” said Scott Anderson, chief economist at Bank of the West. “The job market is in the ICU, and it needs a shot of adrenaline in the form of federal aid.”
However, there are no signs that this type of impulse is difficult, however. Nearly 30 million people draw in some form of unemployment benefit, but a $ 600 weekly supplement to state benefits – credit with keeping millions afloat – expired at the end of July. Democrats and Republicans have been impasse over a new round of aid, and no action is expected for September.
President Trump walked past Capitol Hill this month to provide a $ 300-a-week supplement, drawn from federal disaster funds, to those who pay unemployment. But by Thursday, less than a quarter of states had approved for the program, and only Arizona had put it into action.
Florida, New York and Texas have closed applications because they seek guidance on the rules of the program and the technological needs for processing payments orally. Even states that intend to participate, such as Pennsylvania, have raised doubts about whether it is workable.
“The president’s envelope, temporary, half-baked concept has left many states, including Pennsylvania, with more questions than a clear path forward,” said Penny Ickes, a spokeswoman for the Department of Labor and Industry in the Democratic administration of the state.
The executive action of Mr. Trump is spending $ 44 billion on the program, a figure that Federal Emergency Management Agency officials and the Department of Labor said Thursday should be enough to last four to five weeks. The funds are intended to be retroactive until August 1, so recipients can only be paid through early September.
The previous $ 600-a-week benefit, instead of four months, contributed $ 70 billion a month to the economy, accounting for nearly 5 percent of total household income.
“That’s a pretty substantial piece of gross domestic product,” said Gus Faucher, chief economist at PNC Financial Services Group. ‘And the households that get it are in a precarious position and spend it all out. I am concerned that the expiration of benefits will weigh on the economy in the second half of the year. ”
Millions of recipients of unemployment are already feeling the loss.
“That extra $ 600 is what kept us alive,” said David Leske, a lighting and sound engineer in Ridgway, Pa. Without it, he and his wife are forced to dip into their savings account. “It’s scary,” he said.
This should be a time of dear expectation for Mr. Leske. He works at local schools to live plays, assemblies and other shows.
But a few weeks before the school year is due to begin, the pandemic still prevents large indoor gatherings. In some cases, schools adhere to online instruction.
“Our local district has no intention of doing schooling,” Mr Leske said. “The high school auditorium is now a storage space.”
Mr Leske, 52, said that work began to dry up in March and that the Pandemic Unemployment Assistance Program – an emergency federal program for freelancers and others who are not eligible for state benefits – was essential. to keep him afloat, especially with the $ 600 weekly federal supplement.
He expects to be out of work by September 2021 when schools stop playing plays and meetings. But pandemic unemployment benefits expire at the end of this year.
While longer-term federal relief is in indefinite, FEMA has approved Arizona, Colorado, Idaho, Iowa, Louisiana, Maryland, Missouri, Montana, New Mexico, Oklahoma and Utah for access to three-week funds for the addition of $ 300. FEMA and the Department of Labor said in a conference call with reporters on Thursday that FEMA had so far approved $ 2.4 billion in subsidies and that an additional eight states had applied for funds.
Arizona was the first state to make the so-called payments for lost wages, sending $ 96 million to 320,000 people on Monday and Tuesday. But the timeline for payments “will be all over the card,” potentially lasting several weeks, said John Pallasch, the assistant secretary for employment and training at the Department of Labor.
The challenges include reprogramming old-fashioned computer systems for state to handle the new benefit – a factor that causes weeks of delay with the addition of $ 600 – and dealing with an additional federal agency, FEMA.
“We need to build a whole new subset system with new rules and new reporting requirements with a department that we are not really with,” said Bill McCamley, secretary of the New Mexico Department of Workforce Solutions. “We want to support all our i’s and cross all our t’s.”
In an interview with reporters on Wednesday, New York goocheman Andrew M. Cuomo expressed his concerns about the legality of Mr.’s executive action. Trump said that “if states have to figure out their unemployment insurance management program, it will be weeks or months before anyone gets a check.”
“I would rather do business with the old-time bookie on the street corner than do business with FEMA,” Mr Cuomo added.
Mr. Trump’s resort to federal disaster funds for the supplement followed the distribution on a congressional assistance package that would fit new funds. Democrats want to add $ 600 a week again; Republicans have called for a smaller amount, saying that anything more would discourage the unemployed from looking for work.
As the stalemate continues, the latest numbers of unemployed claims throw up a further pall. The rise in new state reports last week, of 971,000, followed two weeks of declines bringing unemployment insurance claims for the first time since the pandemic, to below one million.
There were 543,000 new claims for Pandemic Unemployment Aid last week. That number is, contrary to the figures for state requirements, not seasonally adjusted.
Despite the discouraging report on jobless claims, Mr Faucher of PNC Financial pointed to pockets of power.
“We are seeing continuous improvement, with housing starting to increase, consumer spending increasing and industrial production increasing,” he said. “But the pace of improvement is slower.”
While the pandemic continues with the buffet of the economy, some workers have been able to find new positions, but not without manly personal sacrifice.
After spending six hours a day submitting more than 600 applications since she ran out this spring and was then fired in July, Sonia Vance, 42, finally got a new job.
In a few weeks, she’s starting as a eyewear consultant in California, Md., Earning $ 16 an hour. The position pays far less than the dream job she previously had – a $ 48,000-a-year human resources role at a staffing company – but it comes with health insurance.
The pillow is comforting because Ms. Vance now has to work in an office every day, despite health issues she fears could complicate a recovery if she finds the coronavirus.
Reflecting on the experience of millions whose careers in the pandemic have evaporated, Ms Vance said the past few months have been “heartbreaking and very emotional.”
This week, they moved out of Maryville, Tenn., And will be staying with a friend temporarily. She is completing bankruptcy paperwork and expects to lose her mobile home.
“You feel relieved to have a job, but there is also a sense of shame and embarrassment,” Ms Vance said. “You are there and doing everything you can to be a good member of society and take care of your own, but it only takes a few months to erase all your hard work.”
