The number of U.S. workers claiming unemployment compensation declined again last week, the Labor Department reported Thursday, even as new outbreaks of the coronavirus threaten more disruption to the American economy.
Thousands of U.S. businesses have reopened after the shutdowns mandated three months ago by the coronavirus pandemic, but many are still laying off workers. Now, some companies are re-closing again as the number of infections reaches new heights in the country’s three biggest states, California, Texas and Florida.
Nearly another 1.5 million laid-off U.S. workers filed for unemployment compensation last week, the 14th straight week the figure had dipped. But the figure was down only slightly from just above 1.5 million each of the last two weeks, all unusually big figures for the world’s largest economy.
The number of workers seeking jobless benefits has now dropped steadily from the 6.9 million who filed for jobless benefits in one week in late March. But key U.S. economic officials are predicting that the country’s full recovery from the pandemic will take a lengthy period, extending well into 2021.
In all, 47 million workers have filed for unemployment compensation since mid-March, more than a quarter of the U.S. labor force of 164.6 million. The number currently receiving benefits has dropped to about 19.5 million as millions of workers have now returned to their jobs.
With a sudden jump in new coronavirus cases, some businesses that had reopened are now shutting their doors again. The new coronavirus cases are largely across the southern tier of the country that had been spared by the initial outbreak in New York and northern states in March and April.
The Apple technology consumer products company shut stores it had reopened in four states — Florida, South Carolina, North Carolina and Arizona — and on Wednesday closed seven stores in Houston, Texas. Some local and state governments have announced layoffs of workers in the aftermath of the pandemic, while giant retailer Macy’s said it is eliminating 3% of its workforce, 3,900 employees.
Governor Greg Abbott in the southwestern state of Texas, who was one of the earliest state officials to permit the reopening of businesses, urged residents to stay home. He said that if the new outbreak of coronavirus cases cannot be controlled, the state might have to impose new restrictions.
As the U.S. economy struggles to regain its standing, President Donald Trump and lawmakers in Congress are debating additional payments to most Americans. But they have yet to reach a consensus on how much the payments would be and who would get them.
The $600-a-week federal payments to unemployed workers on top of lesser normal state jobless benefits end in about five weeks.
But Trump said this week he supports another round of stimulus payments to most taxpayers, even as some of his fellow Republicans voiced concerns about the country’s ever-increasing national debt that now totals more than $26 trillion.
Trump said he envisions again sending $1,200 checks to most individuals, as was already done earlier this year.
“We will be doing another stimulus package,” he told one interviewer. “It'll be very good. It'll be very generous."
Treasury Secretary Steven Mnuchin told reporters, “As we’ve said before, we’re talking about a bunch of different ideas that we may need to do in another bill."
But he cautioned, “We’re going to take our time and make sure that we’re thoughtful. Whatever we do, it will be much more targeted, much more focused on jobs."
House Democrats have approved about $3 trillion in new spending, which would provide more aid for states and cities, among other things. But Senate Republicans and the White House have rejected the plan and are considering other options to boost the economy.
A week ago, Jerome Powell, the chair of the Federal Reserve, the country’s central bank, told a congressional committee that while the U.S. economy has started to rebound from the worst of the coronavirus devastation, “levels of output and employment remain far below their pre-pandemic levels, and significant uncertainty remains about the timing and strength of the recovery.”
Overall, he said, “The shock that we received — the economy received — was the largest in living memory.”
Powell said the sharp downturn wrought by the pandemic has had a pronounced impact on certain segments of the American workforce.
“Low-income households have experienced, by far, the sharpest drop in employment, while job losses of African-Americans, Hispanics and women have been greater than that of other groups,” he said. “If not contained and reversed, the downturn could further widen gaps in economic well-being that the long expansion had made some progress in closing.”
The official U.S. jobless rate was 13.3% in May, although officials say that when a survey error was accounted for, the rate should have totaled 16.4%.
The Fed has predicted that U.S. unemployment will fall to 9.3% by the end of this year and to 6.5% by the end of 2021, a rosier advance than some economists are forecasting.
The U.S. death toll from the virus has now topped 121,000, by far the most in the world, and health experts predict tens of thousands more will die in the coming months.
The coronavirus has had a major effect on U.S. commerce, with more than two dozen companies filing for bankruptcy protection in May.
Yelp, which publishes crowd-sourced reviews about businesses, says that more than 143,000 U.S. businesses have closed since the outbreak of the coronavirus pandemic and that about 50,000 of those businesses are not expecting to reopen.
The government says the national economy dropped 4.8% in the first quarter, but that was before the full impact of the pandemic became apparent for the April-to-June quarter.
Numerous states still require social distancing of at least two meters between people in stores and some major retail outlets are requiring their employees and customers to wear face masks. Some governors are limiting restaurants to half capacity or only allowing outdoor eating with appropriate social distancing.
But in other states, the restrictions have been significantly lifted and crowds have quickly emerged to resume life, shopping or enjoying a day at Atlantic and Pacific beaches, often ignoring the admonitions of health experts to maintain a safe distance from others or to wear a face mask.
But the millions of jobless benefit claims have still been unparalleled over decades of U.S. economic history, reaching back to the Great Depression in the 1930s. The number of claims has far exceeded those made during the Great Recession in 2008-2009.