US layoffs stay high, 1.3m seek jobless benefits

More than 1.3 million Americans applied for unemployment benefits last week, maintaining a historically high pace that shows many employers are still laying people off.
US layoffs stay high, 1.3m seek jobless benefits

A United Airlines worker helps a customer at San Francisco International Airport on Wednesday in San Francisco, California. As the coronavirus COVID-19 pandemic continues, United Airlines has sent layoff warnings to 36,000 of its front line employees to give them a 60 day notice that furloughs or pay cuts could occur after October 1.

More than 1.3 million Americans applied for unemployment benefits last week, maintaining a historically high pace that shows many employers are still laying people off in the face of a resurgent coronavirus.

The persistently elevated level of layoffs are occurring as a spike in virus cases has forced six states to reverse their move to reopen businesses. Those six — Arizona, California, Colorado, Florida, Michigan and Texas — make up one-third of the US economy. Fifteen other states have suspended their reopenings. Collectively, the pullback has stalled a tentative recovery in the job market and is likely triggering additional layoffs.

Yesterday’s report from the Labor Department showed the number of applications for unemployment aid fell from 1.4 million in the previous week. The figure has now topped 1 million for 16 straight weeks. Before the pandemic, the record high for weekly unemployment applications was fewer than 700,000.

The total number of people who are receiving jobless benefits dropped 700,000 to 18 million. That suggests that some companies are continuing to rehire workers.

An additional 1 million people sought benefits last week under a separate program for self-employed and gig workers that has made them eligible for aid for the first time. These figures aren’t adjusted for seasonal variations, so the government doesn’t include them in the official count.

Americans are seeking unemployment aid against the backdrop of a disturbing surge in confirmed viral cases, with increases reported in 38 states. Case counts have especially accelerated in four states that now account for more than half of reported new US cases: Arizona, California, Florida and Texas.

The intensifying outbreaks and more stringent government restrictions have slowed economic activity in much of the country and may be weighing on hiring. The government’s jobs report for June showed a solid gain of 4.8 million jobs and an unemployment rate that fell to 11.1 percent from 13.3 percent.

Yet even so, the economy has regained only about one-third of the jobs that vanished in March and April. And the June jobs report reflected surveys of Americans that were conducted in the middle of that month — before the pandemic flared up again.

More recent data is worrisome. Spending on credit and debit cards issued by Bank of America fell in the week that ended on June 27 from the previous week. Auto and existing-home sales have slowed.

Restaurant visits have also leveled off, including in states that haven’t begun to close down again, according to data from OpenTable, a reservations website.

“This suggests that renewed fears about the virus, rather than government restrictions, are driving the pullback in activity,” said Andrew Hunter, senior US economist at Capital Economics.

Data from Kronos, which produces work-scheduling software for small businesses, reinforces evidence the recovery of the job market is faltering.

David Gilbertson, a vice president at Kronos, said data suggests that consumer demand in many cases hasn’t picked up enough to justify more employees.

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