751,000 seek US jobless benefits as virus hobbles economy
WASHINGTON
(AP) — The number of Americans seeking unemployment benefits fell
slightly last week to 751,000, a still-historically high level that
shows that many employers keep cutting jobs in the face of the
accelerating pandemic.
A surge in viral cases and Congress’
failure so far to provide more aid for struggling individuals and
businesses are threatening to deepen Americans’ economic pain. Eight
months after the pandemic flattened the economy, weekly jobless claims
still point to a stream of layoffs. Before the virus struck in March,
the weekly figure had remained below 300,000 for more than five straight
years.
Thursday’s report from the Labor Department said the
number of people who are continuing to receive traditional unemployment
benefits declined to 7.3 million. That figure shows that some of the
unemployed are being recalled to their old jobs or are finding new ones.
But it also indicates that many jobless Americans have used up their
state unemployment aid — which typically expires after six months — and
have transitioned to a federal extended benefits program that lasts an
additional 13 weeks.
The job market has been under pressure since
the virus paralyzed the economy and has regained barely half the 22
million jobs that were lost to the pandemic in early spring. The pace of
rehiring has steadily weakened — from 4.8 million added jobs in June to
661,000 in September. On Friday, when the government issues the October
jobs report, economists foresee a further slowdown — to 580,000 added
jobs — according to a survey by the data firm FactSet.
Last week,
nearly 363,000 people applied for jobless aid under a new program that
extended eligibility for the first time to self-employed and gig
workers, up slightly from 359,000 the previous week. That figure isn’t
adjusted for seasonal trends, so it’s reported separately.
All
told, the Labor Department said 21.5 million people are receiving some
form of unemployment benefits, though the figure may be inflated by
double-counting by states.
The financial aid package that Congress
enacted in the spring included a $600-a-week federal jobless benefit
and $1,200 checks that went to most adults, in addition to assistance
for small businesses. All that money has run out. Without additional
federal aid, millions of unemployed Americans likely will lose all their
jobless benefits in coming weeks and months, probably forcing them to
scale back their spending. And many small companies could go out of
business.
In the meantime, new confirmed viral cases in the
United States reached an all-time high of more than 86,000 a day, on
average, in a sign of the worsening crisis that lies ahead for the
winner of this week’s presidential election. By contrast, just two
months ago, according to Johns Hopkins University, the seven-day rolling
average for confirmed daily new cases was 34,000.
As temperatures
fall, restaurants and bars will serve fewer customers outdoors. And
many consumers may stay home to avoid infection. Dwindling business
could force employers to slash more jobs during the winter.
The
data firm Womply found that more businesses are shuttering in the face
of a COVID resurgence and a potentially deteriorating economy: 21% of
small businesses were closed as November began, it says, up from 20% in
October, 19% in September and 17% in August. And sales growth is slowing
at the companies that are open.
“The economy is on its own
against the virus,” said AnnElizabeth Konkel, an economist at Indeed.
“Accelerating cases are an ever-present threat during winter, and a
virus surge means economic uncertainty for businesses. Until that
uncertainty is eliminated, the labor market will struggle to return to
what it used to be.”
A series of major corporations have announced
layoffs recently. Last week, Exxon Mobil said it was slashing 1,900
jobs from its U.S. workforce. Chevron said it planned to cut a quarter
of the employees at its recently acquired Noble Energy, with he pandemic
sapping demand for fuel. Charles Schwab announced after completing its
purchase of TD Ameritrade that it would cut 1,000 jobs from the combined
company.
And Boeing said it would make deeper cuts to its
workforce than originally planned. It has been losing money because the
viral outbreak has depressed demand for new planes. Boeing expects to
end the year with about 130,000 employees, down 30,000 from the start of
this year — far more than the 19,000 reduction it had announced three
months ago.
A pandemic-caused jobs crisis is inflicting damage
elsewhere in the world, too. When the viral outbreak struck, halting
most global travel, 1 million people lost jobs in Spain, for example,
and the unemployment rate hit 16.3% in September. The government has
supported the wages of roughly 3.4 million workers and still keeps
600,000 under its national furlough system. But experts warn that Spain
needs to fix its job market, which is plagued with temporary and
part-time contracts.