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US jobless claims fall below 1 million but remain high

FILE - In this July 9, 2020, file photo, a large video display reads "Now hiring for our new hotel coming soon!," at the new Emerald Queen Casino, which is open, and owned by the Puyallup Tribe of Indians, in Tacoma, Wash. The United States added 1.8 million jobs in July, a pullback from the gains of May and June and evidence that the resurgent coronavirus has weakened hiring and the economic rebound. (AP Photo/Ted S. Warren, File)

(AP) — The number of Americans applying for unemployment dropped below 1
million last week for the first time since the coronavirus outbreak
took hold in the U.S. five months ago, but layoffs are still running
extraordinarily high.

The figures show that the crisis continues
to throw people out of work just as the expiration of an extra $600 a
week in federal jobless benefits has deepened the hardship for many —
and posed another threat to the U.S. economy.

Applications for jobless benefits declined to 963,000,
the second straight drop, from 1.2 million the previous week, the
government said Thursday. That signals layoffs are slowing, though the
weekly figure still far exceeds the pre-outbreak record of just under
700,000, set in 1982.

The virus is blamed for more than 166,000
deaths and 5.2 million confirmed infections in the U.S. — easily the
highest totals in the world. The average number of new cases per day is
on the rise in eight states, and deaths per day are climbing in 26,
according to an Associated Press analysis.

Worldwide, the scourge has claimed more than 750,000 lives and caused over 20 million known infections.

virus, the shutdowns meant to fight it and the reluctance or inability
of many people to shop, travel or eat out continue to undermine the
economy and force companies to cut staff. Over the past few months, 23
states have paused or reversed their business re-openings because of a
resurgence of the virus.

Overall, fewer people are collecting
unemployment, a sign that some employers are hiring. The total declined
last week to 15.5 million, from 16.1 million the previous week.

larger-than-expected decline in jobless claims suggests that the jobs
recovery is regaining some momentum, but … much labor market progress
remains to be done,” said Lydia Boussour, senior economist at Oxford

Hiring is believed to have slowed since the spring,
when states reopened and millions of workers at bars, restaurants and
stores were rehired. The job gain in August will probably fall short of
the 1.8 million added in July, analysts say.

months, on top of their state benefit, unemployed Americans also
collected the $600 a week in federal jobless aid. But that expired at
the end of July, and negotiations in Congress to extend it, probably at a
lower level, have collapsed in rancor.

Last week, President
Donald Trump issued an executive order that would provide $300 a week to
replace the expired $600. But experts say it could take weeks for the
states to reprogram their computers and process and dispense the

A crush of benefit applications earlier in the outbreak
resulted in huge backlogs that left millions of the unemployed waiting.
Washington state went so far as to call in the National Guard to help
process applications.

Some economists say they believe the end of
the $600 has contributed to the drop in unemployment claims of late.
Some of the unemployed may feel less incentive to apply.

supplemental federal aid had enabled many jobless Americans to afford
rent, food and utilities, and its expiration threatens to weaken
consumer spending.

Michelle Meyer, an economist at Bank of America
Merrill Lynch, said the loss of the additional aid will reduce
Americans’ incomes by $18 billion a week.

“That’s a big hit to purchasing power,” she said.

addition to people who applied last week for state benefits, nearly
489,000 others sought jobless aid under a new federal program that has
made self-employed and gig workers eligible for the first time. That
figure isn’t adjusted for seasonal trends, so it is reported separately.

Counting those receiving aid under the new program would bring
to 28.2 million — roughly 18% of the U.S. workforce — the number of
Americans now receiving some form of unemployment benefits.

confirmed virus cases still high, it’s not clear when business owners
will be able to reopen or will have enough customers to rehire.

Della is one of them. She opened her food tour business in Miami a
decade ago with $300 from her mother. On weekends, she led the tours
herself and eventually built up a business with 13 guides, averaging 10
tours a day through culinary hot spots in South Beach and Little Havana.

scant customer demand, it has been more than four months since Miami
Culinary Tours has taken out guests. Della, 46, said she hopes to reopen
later this month but isn’t sure she can, given the state’s high level
of confirmed infections.

Della said she tries to stay positive
but confesses to moments of crippling fear. At one point,
hyperventilating with anxiety, she contacted firefighters.

“There’s no money coming in,” Della said. “We’re all scared.”

AP writer Kelli Kennedy in Fort Lauderdale, Florida, contributed to this report.