More Americans applying for unemployment aid, raising concerns about recovery
The number of Americans filing for jobless aid rose last week, signaling that layoffs continue five months after the coronavirus first slammed the economy.
Some 1.1 million people filed for first-time unemployment benefits, the Labor Department said Thursday. That's an increase of 135,000 from the previous week. Another 543,000 filed for Pandemic Unemployment Assistance, a new program to aid the self-employed and gig workers.
Economists had predicted that fewer than 1 million people would apply for unemployment aid. The number of new applications has been dropping steadily since March, and in the first week of August dipped below 1 million. But last week's rebound shows that labor market recovery may have stalled.
"A partial economic bounceback looks to be sputtering out," AnnElizabeth Konkel, an economist at the Indeed Hiring Lab, said in a note. "While the uptick certainly isn't good, it's too soon to tell how bad it really is. What's more concerning is the raw size of the claims, still 6.9 times higher than during the pre-COVID era."
A staggering 28 million people, or about one-fifth of the U.S. workforce, were receiving some sort of unemployment assistance as of August.
Experts say a sharp decline in weekly benefits after supplementary assistance lapsed in July could hurt consumer spending and weigh on economic growth. States with higher unemployment are seeing a decline in customers in stores, Deutsche Bank economists note.
End of a lifeline
The latest bout of layoffs follows the expiration in late July of a $600 weekly unemployment payout for jobless Americans — a benefit that had provided vital support for millions. Negotiations in Congress to extend those benefits at a lower level of payment have collapsed.
The Trump administration is offering a short-term $300-a-week federal benefit, which states need to apply for and must revamp their computer systems to accommodate.
For 24-year-old Carli Duncan, who was laid off from an auto body shop in April, the added $600 was a way to keep paying her rent on the Manchester, Georgia, home where she lives with her husband and his two teenage sisters, who are disabled.
"My regular unemployment without the extra was $150 a week. And that's just... nobody can pay bills on that," she said.
Duncan said she'd looked for work at other auto body shops but that none were hiring for now. She's also applied for retail jobs including at Walmart, but hasn't heard back. Duncan is now looking for work as a housecleaner and trying to pick up odd jobs, she said.
"It's stressful — stressful and frustrating, knowing you have bills that are going to come due, and there's nothing you can do that you haven't already tried or are trying to do," she said.
