Another 963,000 unemployed U.S. workers filed for government jobless compensation last week, the government’s Labor Department reported Thursday, but it was the first time since March that the weekly total had fallen below a million claims.
For 20 straight weeks, more than a million jobless workers had sought government assistance as the virus unrelentingly attacks communities large and small throughout the country, forcing employers to shut down their businesses or curtail their operations and lay off workers.
But last week’s claims total, while still high, was an improvement, down 228,000 from the week before.
Unemployment benefit claims have fallen sharply since late March in the earliest days of the pandemic’s assault on the U.S. economy when 6.9 million Americans sought relief in a single week. But before then, the worst recorded single week was in 1982, when 695,000 sought benefits, and every week during the coronavirus pandemic has been well above that four-decade-old figure.
Even with last week’s improved jobless claims number, the country’s economic recovery has slowed, with the government reporting last week that 1.8 million new jobs were added in July, down sharply from the 4.8 million new jobs reported in June.
Until the end of July, the U.S. was sending an extra $600 a week to the jobless workers on top of less generous state unemployment benefits. But the White House and opposition Democrats in Congress have been unable to reach a new agreement on extending the coronavirus aid to jobless workers or families, businesses and state and local governments throughout the country.
President Donald Trump last weekend signed an executive order he said would send an extra $400 a week to jobless workers, if states contributed $100 of that amount, and temporarily end the 7.65% payroll tax for working Americans earning less than $100,000 a year. But details of the assistance have been slow to emerge and the additional aid could take weeks to be implemented.
Democratic lawmakers want to extend the $600-a-week payments through the end of 2020, but Republicans say the figure is too high, with some unemployed workers collecting more in jobless benefits than they were paid while working. The higher figure, the Republicans say, is an incentive to stay home and not return to work, although some employers have eliminated jobs their workers once held.
Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows representing Trump had been negotiating with House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer over the jobless benefits and other aid to boost the flagging U.S. economy that has been staggered by the coronavirus pandemic.
But the talks ended last week and an attempt to resume them Wednesday proved futile. Trump said a deal is “not going to happen.”
The Commerce Department says the American economy plummeted 9.5% between April and June, the biggest quarterly plunge in records dating back seven decades.
The three-month drop, combined with a 4.8% dip from January through March, officially dipped the U.S. economy into a recession as it struggles to regain its footing. The unchecked pandemic, with a surging number of new cases, has left more than 166,000 Americans dead and infected nearly 5.2 million.
It is estimated that more than 30 million U.S. workers remain unemployed, although not all are collecting assistance. Since March, 56 million people have collected unemployment insurance at one time or another.
Federal Reserve Chair Jerome Powell says a full economic recovery depends on the country’s ability to control the virus, something it has been unable to do so far.
“A full recovery is unlikely until people are confident that it’s safe to engage in a broad range of economic activities,” Powell said recently.
The southern tier of U.S. states that had escaped the brunt of the pandemic in March and April has been particularly hard hit. Their governors reopened businesses — too soon, some now acknowledge — and younger people started socializing in public again at bars and restaurants without embracing such preventive practices as wearing a face mask or social distancing themselves from others by at least two meters.
Now, some state governors are ordering these businesses shut down again. Investment bank Goldman Sachs said 70% of the country has either reversed reopening plans or delayed them.
Key U.S. economic officials are predicting the country’s full recovery from the pandemic will take a lengthy period, extending well into 2021.
The Federal Reserve, the country’s central bank, has predicted that the U.S. unemployment rate, 11.1% in June, will improve to 9.3% by the end of 2020 and to 6.5% by the end of next year.
