New applications for jobless benefits fell slightly to one million last week
By guest author Sarah Chaney rom Wall Street Journal
Unemployment claims fell slightly to 1 million last week, signaling layoffs continue as the coronavirus hampers a smooth economic recovery.
New applications for unemployment benefits remained well below the recent peak of about 7 million in March but are far higher than pre-pandemic levels of about 200000 claims per week.
The number of people collecting unemployment benefits through regular state programs, which cover most workers, ticked down to about 14.5 million for the week ended Aug. 15, the Labour Department reported on August 27, 2020,
“We’re chipping away at the losses in terms of the number of jobs and some of the weaknesses there, but there’s still a long ways to go,” said Sarah House, senior economist at Wells Fargo Securities.
In a separate report, the Commerce Department revised its estimate of second quarter economic growth, saying gross domestic product fell at a 31.7 % annual rate, slightly less than its earlier estimate of 32.9 %, due to the effects of the coronavirus pandemic.
Employers added 1.8 million jobs in July, the third consecutive month of hiring. The jobless rate fell last month to 10.2% after peaking near 15% in April.
Still, weekly applications for jobless benefits are much higher than the pre-pandemic record of 695000.
“It’s massively concerning that five months into this crisis we are still seeing those levels,” said AnnElizabeth Konkel, an economist at the job site Indeed. “It’s just really pointing to how much economic pain there is right now, and I don’t really expect that to change anytime soon.”
Job postings on Indeed declined for two consecutive weeks in August, which Ms. Konkel said could point to an economic backslide. Indeed job listings for higher-wage occupations have declined more than for lower- and middle-wage positions. Such a trend could point to long-term uncertainty among employers, as those in higher-wage sectors might plan their head counts based on projections for business demand several quarters into the future, according to Indeed.
ob losses during the economic crisis have been widespread across industries and particularly steep in some services sectors, such as hospitality and tourism, which have been badly hurt by the coronavirus pandemic and lockdowns imposed to curb it.
American Airlines Group Inc. said this week that it would shed 19000 workers by Oct. 1, a sign of the devastation coming for the airline industry as the summer travel season winds down and government funds run out. Delta Air Lines Inc. said it would furlough 1941 pilots unless it reaches a deal with their union on other cost reductions.
The July 31 expiration of the separate, federally funded $600-a-week enhanced unemployment aid meant payments to those receiving support through regular state programs fell to levels approved by their states, which average a little more than $300 a week, according to the Labour Department.
President Trump signed an executive order Aug. 8 allowing states to tap disaster-relief funds to pay for a reduced $300 a week in enhanced aid on top of state benefits. More than half of states have now received federal approval to distribute the extra $300 payments. Delivery of the additional money will vary by state, and the Labor Department estimates it could take an average of three weeks before people start receiving the supplemental assistance.
An index of consumer confidence dropped in August to its lowest level since 2014, the Conference Board said Tuesday, which some analysts said could reflect growing consumer concerns about the diminished federal aid.
Weaker consumer sentiment also underscored Americans’ souring views about their labor-market prospects. The percentage of consumers in the Conference Board’s survey saying jobs are plentiful dropped to 21.5 % in August from 22.3% in July. Meanwhile, those claiming jobs are hard to get rose to 25.2 % this month from 20.1 %.
Robin Emura, 64 years old, said she had to start economizing when the pandemic hit her freelance graphic-design business earlier this year.
“We used to put a nice dinner on the table every night. Suddenly we were forced to really budget,” she said. “We had to really watch our pennies and still are.”
Business has picked up slightly since the beginning of the pandemic, but the Flowery Branch, Ga., resident said she is bringing in about one-third as much money from her design gigs as she was before the coronavirus struck in March.
“It’s a hard climb getting back to where I was, and I don’t see it happening for probably at least another six months,” Ms. Emura said.
Since the extra USD 600 in unemployment aid expired at the end of July, Ms. Emura has collected USD 125 a week in jobless benefits. She expects that an additional federally funded payment of USD 300, which she sees as a reasonable amount, to provide “a little extra breathing room.”