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Jobless claims top 1 million for 20th week

Work still disappearing: Some laid off a 2nd time by Compiled by Democrat-Gazette staff from wire reports | August 7, 2020 at 7:23 a.m.
Job seekers wait to be called at the Heartland Workforce Solutions office in Omaha, Neb., in mid-July. The number of jobless claims across the U.S. declined last week by about 249,000 from the previous week, but claims remain at high levels even as the extra $600 in weekly unemployment benefits has expired. (AP/Nati Harnik)

WASHINGTON -- Nearly 1.2 million laid-off Americans applied for state unemployment benefits last week, the Labor Department said Thursday, evidence that the coronavirus keeps forcing companies to slash jobs just as a $600-a-week federal jobless payment has expired.

The number of jobless claims declined by 249,000 from the previous week, after rising for two straight weeks, and it was the lowest total since mid-March.

Still, claims remain at high levels: It is the 20th straight week that at least 1 million people have sought jobless aid.

Around the country, across industries and occupations, millions of Americans thrown out of work because of the pandemic are straining to afford the basics after the extra unemployment benefits ended last week.

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"My worst nightmare is coming true," said Liz Ness, a laid-off recruiter at a New Orleans staffing agency who fears she will be evicted next month without the added help from Washington. "Summer 2020 could be next year's horror movie."

Last week, an additional 656,000 people applied for jobless aid under a program that for the first time has extended eligibility to self-employed and gig workers. That figure isn't adjusted for seasonal trends, so it's reported separately.

The Labor Department said a total of 31.3 million people are now receiving some form of unemployment benefits, though the figure may be inflated by double-counting by some states.

Funds from the Paycheck Protection Program, the $660 billion federal aid program that was meant to help small businesses keep workers on the payroll, are also running out. And the pandemic's frightening march since mid-June has added to uncertainty about when the country can expect a return to a normal way of life and doing business.

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Lawmakers on Capitol Hill are struggling to work out an agreement that would restore some federal jobless aid. Even if they do reach a deal, the amount is likely to be less than $600. And by the time the money starts flowing, it could be too late for many Americans who are already in dire straits

Before the pandemic hit hard in March, the number of Americans seeking unemployment checks had never surpassed 700,000 in a week, not even during the Great Recession of 2007-09.

Rubeela Farooqi, chief U.S. economist at High Frequency Economics, called the drop in weekly claims "a move in the right direction." But in a research note, she added:

"Repeated shutdowns for virus containment remain a threat to the labor market, which is already weak. The possibility of mounting layoffs that could become permanent is high. Without effective virus containment, the recovery remains at risk from ongoing job losses that could further restrain incomes and spending."

LAID OFF TWICE

A study released Monday by Cornell University found that 31% of those laid off or furloughed because of the pandemic had been laid off a second time. An additional 26% of people who were called back to work reported being told they might lose their jobs again.

After the springtime lockdowns, restaurants and bars had begun to reopen. Yet many soon had to reclose as viral cases surged, especially in the Sun Belt. In Texas, for instance, just 26% of bars were closed June 21. Two weeks later, the figure had shot up to 74%, though it has since come down slightly, according to the data firm Womply.

The pandemic, the lockdowns meant to contain it and the wariness of many Americans to venture back out to eat, shop or travel have delivered a big blow to the economy despite the government's emergency rescue efforts. The nation's gross domestic product, the broadest measure of economic output, shrank at an annual rate of nearly 33% from April through June. It was by far the worst quarterly fall on record, though the economy has rebounded somewhat since then.

This morning, the Labor Department will offer another gauge of the pandemic's impact: the employment report for July. Economists' forecasts vary widely, with a consensus pointing to a gain of 1.5 million jobs, but some expecting a net loss.

So deeply did employers slash payrolls after the pandemic paralyzed the economy in March that even a July gain would mean that barely 40% of the jobs lost to the coronavirus have been recovered.

RISK OF EVICTION

In the meantime, millions of unemployed people suddenly have less money to pay for essentials. Many of them are among the 23 million people nationwide who are at risk of being evicted from their homes, according to The Aspen Institute, as moratoriums enacted because of the pandemic expire.

Clover Williams, a teacher in Gallup, N.M., said she was laid off "right when the thing runs out -- the extra $600 runs out."

She received one unemployment check that included the extra payment. Without it, Williams, 63, worries that she won't be able to pay her utility bills or medical expenses.

In Florida, whose tourism industry has been pummeled, 38-year-old John Brenner of Plantation lost his position as a hotel manager and has been out of work for four months. Florida's weekly unemployment aid is capped at $275 a week, so "I'm quite reliant on that extra $600," he said.

"The anxiety the Senate is giving me isn't helping much," Brenner said.

"Members of Congress may have the luxury to come to an agreement this week and vote next week and then roll it out over several weeks," said Brian Gallagher, chief executive officer of United Way Worldwide. "Families don't have that luxury -- they are out of money tomorrow."

CHARITIES SWARMED

Food banks, pantries and other safety net organizations report soaring demand from people in need. Charitable groups worry the problem will worsen with the end of the $600 payments and the expiration of moratoriums on evictions.

While the elevated levels of jobless claims show that businesses are still struggling to keep employees on the payroll, there has been some pickup in hiring. After drooping, job postings at the online jobs site ZipRecruiter rose by 7.4% in July and are still climbing, said Julia Pollak, the company's labor economist.

But the latest economic data is mixed, she cautioned. Surveys from the Institute for Supply Management, for instance, showed that business activity in service industries expanded last month, but that the employment index declined, an indication that many companies are still not bringing back workers.

There were steep increases in joblessness related to the performing arts and other live events in July, Pollak said.

And announcements of impending layoffs continue to pile in. Pollak has been tracking plant closings and layoffs that the government requires to be announced in advance. "They are showing that new layoffs are still taking place at an alarming rate," she said. "Plenty of layoffs are scheduled for August, September and October as well."

"Many companies are realizing now that the effects will be much longer than expected," she said.

Information for this article was contributed by Paul Wiseman, Christopher Rugaber, Sarah Skidmore Sell, Kelli Kennedy, Candice Choi, Sophia Tulp and Sudhin Thanawala of The Associated Press; by Eli Rosenberg of The Washington Post; and by Patricia Cohen of The New York Times.

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