By Eric Morath
The number of workers receiving unemployment benefits fell for
the first time since February and new weekly claims continued to
ease, offering evidence that layoffs related to the coronavirus
pandemic are slowing.
Initial claims for unemployment benefits declined to a
seasonally adjusted 2.1 million last week from 2.4 million the
prior week, the Labor Department said. The level of claims is still
10 times prepandemic levels but has fallen for eight straight
weeks.
Meanwhile, the number of workers receiving jobless payments for
the week ended May 16 was 21.1 million, down 3.9 million from the
prior week. The level remains well above the record before this
year -- 6.5 million in 2009 -- and underscores that tens of
millions remain jobless.
Commerce Department data on Thursday showed gross domestic
product -- the value of all goods and services produced across the
economy -- fell at a downwardly revised 5.0% annual rate during the
first quarter, overlapping in March with when the pandemic hit the
economy.
Corporate profits declined sharply to start the year, the
Commerce Department also said, and orders for long-lasting durable
goods, such as machinery and trucks, fell 17.2% in April from a
month earlier.
Fewer workers on unemployment rolls adds to evidence that while
layoffs have been steep and are continuing, some Americans are
getting back to work. That suggests the U.S. labor market is at an
inflection point where new layoffs are largely offset by hiring and
workers are being recalled to their old jobs.
Crystal Hollings, of Pascagoula, Miss., is among those returning
to work.
She was laid off from the Goodwill Ocean Springs Mega Store for
several weeks this spring, but recently returned to prepare the
thrift shop for a June 1 reopening. Unemployment benefits allowed
Ms. Hollings to pay bills, but she was relieved to return to a job
she said lifted her and her family out of homelessness in 2016.
"I love what I do and I love being around people," she said.
"I'm just trying to make it safe and clean for all our customers to
come back."
The store will require employees to wear masks and gloves and
stay 6 feet from customers. When Ms. Hollings reapplied for
employment she sought, and received, a promotion to assistant
manager. Not all of her former co-workers returned, she said.
"Some didn't want to come back because they're still iffy on the
pandemic," said Ms. Hollings. "I wanted to come back the next day
[after her layoff]. I'm not one to sit at home."
As states allow businesses to reopen and citizens to move more
freely, many companies are recalling workers, though often fewer
than they laid off in March or April. Restaurants, hit hard by the
crisis, face months of adjustment as the virus upends the
industry's business model.
Employees reported for 17% more shifts for the seven days ended
May 24 than they did six weeks earlier, when job activity bottomed
out, according to Kronos, a Massachusetts workforce management
software company.
And some firms have begun hiring. Job search site Indeed.com
said job postings have increased during the past three weeks,
though the total is still down 35% from a year earlier.
Companies are also bringing back workers to qualify for
government loan forgiveness, though some have warned they may need
to lay off employees again when that support runs out.
Still, companies are continuing to announce layoffs. Boeing Co.
said this week that it will shed more than 13,000 employees and
American Airlines Inc. said it would cut its management and
administrative staff by 30%, amounting to more than 5,000
workers.
Others are planning to increase staffing levels. Amazon.com Inc.
plans to keep most of the U.S. jobs it added to meet demand in
March and April as housebound Americans turned to online
deliveries. Walt Disney Co. said it plans to begin reopening its
Florida theme park at reduced capacity in mid-July.
"I think we've hit the bottom, as far as layoffs," said Marianne
Wanamaker, a labor economist at the University of Tennessee. "Auto
factories and suppliers have called back workers and you're seeing
states that shut down construction allowing those projects to
restart," she added.
Many economists say it will take many months, if not years, to
replace all the jobs lost this spring. Forecasters at the
University of Michigan project the pandemic-related shock will
result in about 30 million total jobs lost, with about a third of
those returning this summer.
The expected long recovery underscores the depth of the economic
contraction the virus caused. Most economists expect a bigger
contraction in the second quarter, when lockdowns continued for
weeks before states started slowly reopening their economies in
May.
Some businesses are starting to see increased, though still
halting, demand for their products.
Tents Unlimited, an event rental company in Torrington, Conn.,
recently recalled three laid-off workers after it qualified for a
federal loan and the state allowed restaurants to start serving
patrons outside last week. That caused a rush in orders for tents
and tables, said Brittany Sherwood, who owns the business.
The company still has one employee on layoff and has forgone
hiring about six temporary workers it would have needed to staff
the usual crush of spring weddings and corporate events.
"It's going better -- it was pretty bleak before," Ms. Sherwood
said. The restaurant orders don't replace all the lost work "but it
helps pay the bills." The company's sales are still down 80% from
last year, but she is hopeful it can survive until 2021, which she
expects to be a spring busy with rebooked weddings.
The primary claims totals from the Labor Department exclude
self-employed and gig-economy workers receiving unemployment
benefits for the first time through a temporary coronavirus-related
program.
New claims to that program fell slightly in the week ended May
23 to 1.19 million from 1.25 million. Unlike the regular claims
program, pandemic assistance data isn't seasonally adjusted.
Many states have only started paying benefits through the new
program in recent weeks, suggesting recent claims likely reflect a
backlog built since March. It is also likely some applying for the
relief program earlier sought assistance through state programs and
had applications rejected.
Harriet Torry and Josh Mitchell contributed to this article.
Write to Eric Morath at eric.morath@wsj.com
(END) Dow Jones Newswires
May 28, 2020 16:57 ET (20:57 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.