The number of Americans filing new claims for unemployment benefits fell more than expected last week to about 880,000 – a sign of possible improvement amid the coronavirus pandemic.
New claims for state unemployment benefits totaled 881,000 for the week ending August 29 – down from the 1 million in the prior week, the Labor Department said on Thursday.
Economists had been predicting about 950,000 applications in the latest week.
While the number of claims dropped more than expected, the figure still remains extraordinarily high and is evidence the economy is still struggling to sustain a recovery and rebuild a job market devastated by the COVID-19 pandemic.
New claims for state unemployment benefits totaled 881,000 for the week ending August 29
The government said that 13.3 million people are continuing to receive traditional jobless benefits, which is up from 1.7 million a year ago.
The number of people who keep applying for unemployment aid each week point to a sluggish pace of improvement.
Before the pandemic struck the economy in March, the number of people seeking jobless aid had never topped 700,000 in a week, not even during the depths of the 2007-2009 Great Recession.
The economy has recovered 9.3 million, or only 42 percent, of the jobs that were lost in March and April.
On Friday, when the government issues the jobs report for August, it’s expected to report that employers added roughly 1.4 million jobs last month. That would still leave the economy about 13 million jobs short of the number it’s lost to the pandemic.
Still, the auto and housing industries have made solid gains, bolstered by rock-bottom loan rates. American factories, too, have been on the upswing for three straight months.
New claims for state unemployment benefits totaled 881,000 for the week ending August 29 – down from the 1 million in the prior week, the Labor Department said on Thursday
While the number of claims dropped more than expected, the figure still remains extraordinarily high and is evidence the economy is still struggling to sustain a recovery and rebuild a job market devastated by the COVID-19 pandemic
Yet many companies across the spectrum – from small businesses to hotels, restaurants, airlines and entertainment venues – remain deeply hurt by a loss of customers.
A wave of layoff announcements by major companies has heightened concerns that many job losses will end up being permanent.
Ford is offering buyouts to try to shrink its US white-collar workforce by 1,400. MGM Resorts is laying off 18,000, about a fourth of its US staff. Coca-Cola, heavily reliant on entertainment venues, is offering buyouts to 4,000.
United and American airlines, hurt by diminished air travel, said they will cut thousands of jobs unless the government provides additional aid to help cover payroll costs. Salesforce is cutting 1,000 jobs, Bed Bath & Beyond 2,800.
Many economists warn that mass layoffs will continue and that any recovery will likely falter as long as the virus rages and Congress doesn’t extend another round of rescue aid for the unemployed and for state and local governments.
The recovery remains fragile because of a still-elevated level of confirmed COVID-19 cases and the government’s failure to enact another emergency rescue package.
The recent expiration of a $600-a-week federal jobless benefit has deepened the difficulties for America´s unemployed.
The Trump administration is now providing a stripped-down version of that benefit – $300 a week – though not all the unemployed will qualify for it.