Nearly 1.2 million laid-off Americans applied for state unemployment benefits last week, evidence that the coronavirus keeps forcing companies to slash jobs just as a critical $600 weekly federal jobless payment has expired.
The Labor Department's report Thursday marked the 20th straight week that at least 1 million people have sought jobless aid. Before the pandemic hit hard in March, the number of Americans seeking unemployment checks had never surpassed 700,000 in a week, not even during the Great Recession of 2007–09.
The pandemic, the lockdowns meant to contain it and the wariness of many Americans to venture back out to eat, shop or travel have delivered a devastating blow to the economy, despite the government's emergency rescue efforts. The nation's gross domestic product, the broadest measure of economic output, shrank at an annual rate of nearly 33 percent from April through June. It was by far the worst quarterly fall on record, though the economy has rebounded somewhat since then.
The historic job losses will be hard to recover
On Friday the government is expected to report a sizable job gain for July — 1.6 million. Yet so deeply did employers slash payrolls after the pandemic paralyzed the economy in March that even July's expected gain would mean that barely 40 percent of the jobs lost to the coronavirus have been recovered.
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And the pace of hiring is clearly slowing. A resurgence of cases in the South and West has spread elsewhere and upended hopes for a speedy economic recovery as bars, restaurants and other businesses have had to delay or reverse plans to reopen and rehire staff.
All told, 16.1 million people are collecting traditional unemployment benefits from their state. For months the unemployed had also been receiving the $600 a week in federal jobless aid on top of their state benefit. But the federal payment expired last week. Congress is engaged in prolonged negotiations over renewing the federal benefit.
Clover Williams, a teacher in Gallup, New Mexico, said she was laid off “right when the thing runs out — the extra $600 runs out."
She received one unemployment check that included the $600 payment. Without it, Williams, 63, worries that she won't be able to pay her utility bills or medical expenses.
Some have been laid off multiple times during the pandemic
In the meantime, millions of the unemployed suddenly have less money to pay for essentials. Many of them are among the 23 million people nationwide who are at risk of being evicted from their homes, according to the Aspen Institute, as moratoriums enacted because of the coronavirus expire.
Last week an additional 656,000 people applied for jobless aid under a program that has extended eligibility for the first time to self-employed and gig workers. That figure isn't adjusted for seasonal trends, so it's reported separately.
A study released Monday by Cornell University found that 31 percent of those laid off or furloughed because of the pandemic had been laid off a second time. An additional 26 percent of people who were called back to work reported being told that they might lose their jobs again.
After the springtime lockdowns, restaurants and bars had begun to lift restrictions. Yet many soon had to close again as viral cases surged, especially in the Sun Belt. In Texas, for instance, just 26 percent of bars were closed on June 21; two weeks later, the figure had shot up to 74 percent, though it has come down slightly since then.