By Eric Morath and Kim Mackrael
The number of workers seeking new unemployment benefits has
plateaued at a historically high level, showing that many Americans
are still losing their jobs amid a broadly healing labor
Weekly jobless benefit applications, historically a proxy for
layoffs, have held between 1 million and 2 million since late May,
and economists expect the figure will remain in that range again
for the week ended July 4. The Labor Department will release fresh
data at 8:30 a.m. ET on Thursday.
The level of new claims has eased from the 6.9 million peak
touched in mid-March when the coronavirus pandemic and mandated
businesses closures shut down wide swaths of the U.S. economy. But
the recent levels are still well above the highest week on record
before this year, which was 695,000 in 1982.
Thursday's report, however, may not give a clear view into the
labor market. The Independence Day holiday, observed July 3,
reduced the number of business days applicants had to file. It is
not required for a worker to seek benefits the same week they are
laid off. Also, the seasonally adjusted data tend to be volatile
around major holidays, because the timing differs slightly from
year to year.
The number of Americans receiving ongoing unemployment benefits
has held near 20 million in recent weeks, down from a peak of
nearly 25 million in early May, according to the Labor Department.
The leveling of the numbers on unemployment rolls, also known as
continuing claims, suggests new layoffs are being offset by hiring
and recalling of workers.
Employers added a combined 7.5 million jobs in May and June
after shedding 21 million jobs in March and April, separate Labor
Department data showed.
Whether that recent rate of job creation, and relatively lower
pace of layoffs, can continue is in doubt as coronavirus infections
increased in several large states, including Texas and California,
causing authorities to recalibrate reopening plans and creating
renewed uncertainty for many businesses and consumers.
Alyssa D'Angola, a 35-year-old bartender in Austin, Texas, lost
her job at the Golden Goose for a second time in late June when the
state ordered bars to close to stem a resurgence in coronavirus
cases. She had only been back at work for five weeks when the
second closure began.
Ms. D'Angola said she was able to delay her mortgage payments
beginning in the spring and is receiving unemployment benefits,
including a $600 weekly top up from the federal government. That
extra benefit is set to expire at the end of this month. "When all
this stuff runs out, I don't know where I'm going to be," she
Many economists, including Bradley Hardy at American University
in Washington, D.C., expect overall employment growth will
continue, but at a significantly slower pace than over the past two
"When you see the rising number of cases," he said, "you have to
ask to what degree will that tamp down foot traffic and spending,
and ultimately employment."
Several large employers have signaled future pullbacks.
United Airlines Holdings Inc. told 36,000 employees, about half
its U.S. workforce, on Wednesday that they could be furloughed from
Oct. 1 because of the pandemic-driven slump in passenger demand.
Clothing retailer Brooks Brothers, which filed for bankruptcy this
week, has permanently closed 50 stores due to the pandemic.
McDonald's Corp. and Apple Inc. are among the companies that have
halted plans to reopen stores or announced new temporary
Still, some businesses are seeing a marked pick up and are
recalling workers this summer.
Geoff Wolpert, owner of the Peddler Steakhouse and the Park
Grill restaurants in tourism hub Gatlinburg, Tenn., laid off 138 of
his 147 employees in late March, when the restaurants temporarily
closed. About two-thirds of those workers were able to apply for
unemployment benefits, he said. Mr. Wolpert also emptied the
restaurants' freezers, making 180 seven-day food boxes for staff
The two restaurants reopened a week apart in late May. "I'm
going to want to remember those for the rest of my life," he said
of the reopening days. All employees were recalled, though 16 chose
not to return.
After reopening, sales at the restaurants were initially half
the previous year's amount, but in recent weeks, revenue returned
to the 2019 level, he said.
The bulk of hiring in recent months has come from businesses
recalling workers to their former jobs, said Joaquin Alfredo-Angel
Rubalcaba, an economist at the University of North Carolina. With
all states at least partially lifting restrictions imposed this
spring to limit the spread of Covid-19, he expects rehiring will
contribute less to overall employment gains in the coming
Matching unemployed workers to new jobs will be a slower
process, Mr. Rubalcaba said. Firms are likely to face increased
costs for employee health benefits and unemployment insurance, and
remain uncertain about the path of the economy, he said.
"We're attempting to confront a public-health crisis, but
haven't been successful in doing that," Mr. Rubalcaba said. "That
makes it hard to have a lot of confidence that the economy will
continue to get better."
--Justin Baer contributed to this article.
Write to Eric Morath at firstname.lastname@example.org and Kim Mackrael at
(END) Dow Jones Newswires
July 09, 2020 05:44 ET (09:44 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.