WASHINGTON (AP) – The number of Americans claiming unemployment benefits fell by 89,000 last week to 803,000, proof that the labor market remains under pressure nine months after the coronavirus outbreak sent the economy America in recession and caused millions of layoffs.
The latest figure, released by the Labor Department on Wednesday, shows many employers continue to cut jobs as the pandemic tightens trade restrictions and leads many consumers to stay at home. Before the virus hit, jobless claims were typically around 225,000 a week before pulling up to 6.9 million in early spring when the virus – and efforts to contain it – flattened the economy . The pace of layoffs has since declined, but remains historically high in the face of the resurgence of COVID-19 cases.
“The fact that, more than nine months after the onset of the crisis, the original demands continue to perform at such a high level is, in absolute terms, bad news,” wrote Joshua Shapiro, the company’s chief US economist. of economic consultancy Maria Fiorini Ramirez Inc. in a research note. “As the pandemic worsens, it is likely that claims will remain quite high for some time to come. ”
The total number of people receiving traditional state unemployment benefits fell to 5.3 million for the week that ended on December 12 a week earlier. This figure had peaked in early May at nearly 23 million. The steady decline since then means some unemployed Americans are finding work and no longer receiving assistance. But it also indicates that many unemployed people have used up their state benefits, which usually expire after six months.
Millions of additional unemployed Americans are now collecting checks under two federal programs that were created in March to ease the economic pain inflicted by the pandemic. These programs were to expire on Boxing Day. On Monday, Congress agreed to extend them as part of a $ 900 billion pandemic rescue plan.
On Tuesday evening, however, President Donald Trump suddenly raised doubts about this aid and other federal funds in attack congressional bailout as inadequate and suggesting that he might not sign it into law.
The additional federal unemployment benefit in Congress’ new measure has been set at $ 300 per week – only half of the amount expected in March – and will expire in 11 weeks. A separate benefit program for unemployed people who have exhausted their regular state aid and another benefit program for the self-employed and small workers will also only be extended until early spring, well before the economy has not fully recovered.
An attempt to recover the economy from the spring collapse has faltered amid a resurgence of COVID-19 cases: an average of more than 200,000 confirmed cases per day, compared to less than 35,000 in early September. Hiring in November slowed for a fifth consecutive month, with employers adding the fewest jobs since April. Nearly 10 million of the 22 million people who lost their jobs when the pandemic struck in the spring are still unemployed.
Closures are on the rise at some hard-hit businesses, according to data firm Womply. For example, 42% of bars were closed on December 16, compared to 33% in early November. Over the same period, closures increased from 25% to 29% in restaurants and from 27% to 35% in salons and other health and beauty stores.
The number of unemployed people who receive assistance from one of two federal extended benefit programs – the Pandemic Unemployment Assistance Program, which provides coverage to construction workers and others who are not are not eligible for traditional benefits – rose from nearly 27,000 to 9.3 million in the week ending Dec. 5.
The number of people receiving assistance under the second program – the Emergency Pandemic Unemployment Compensation Program, which provides federal unemployment benefits to people who have exhausted their state aid – has fallen by nearly 8,200 to 4.8 million.
A total of 20.4 million people are currently receiving unemployment benefits. (The figures for the two pandemic-related programs are not seasonally adjusted.)
States and cities are increasingly issuing mask warrants, limiting the size of gatherings, restricting or banning restaurants, closing gyms or reducing the hours and capacity of bars, stores and other businesses, which slowed down economic activity. However, as vaccines now begin to roll out gradually, optimism is mounting around 2021.
In a few months, economists say, the widespread distribution and use of vaccines could potentially trigger a robust economic rebound as the virus is canceled, businesses reopen, hires resume and consumers spend freely again.
Until then, the limited aid Congress has agreed to is unlikely to be enough to avoid hardship for many households and small businesses, especially if lawmakers are reluctant to pass additional aid early next year. And a growing financial gap between affluent and poor households is likely to worsen.