Weekly Unemployment Claims on Track for 21 Weeks Above 1 Million
By Sarah Chaney
Unemployment claims likely held steady at historically high
levels last week, an indication companies continued to lay off
workers nearly five months into the coronavirus pandemic.
Economists estimate initial unemployment claims fell slightly to
1.1 million last week, which would mark 21 straight weeks claims
logged in above 1 million. New applications for unemployment
benefits declined in the prior week and are down significantly from
a peak of near 7 million in March, but still nearly twice the
pre-pandemic record of 695,000.
The number of people collecting unemployment benefits through
regular state programs, which cover the majority of workers,
decreased at the end of July. That figure, at about 16.1 million,
was still well above the pre-pandemic peak of 6.6 million in
"We're just running a lot of layoffs week after week even as a
lot of people are coming back to work," said Guy Berger, economist
at LinkedIn. "There's still a lot of labor market distress out
there that's emerging."
Mr. Berger said businesses remain cautious and more of the
layoffs occurring now are permanent than at the onset of the
pandemic. Further, companies could face a pullback in demand since
the extra $600 weekly unemployment benefit expired last month,
leaving less money in workers' pockets.
President Trump signed an executive action on Saturday that
authorized states to extend a federally funded $300 in benefits and
provide an extra $100 in state-funded benefits. States will likely
not start implementing the supplemental benefits for weeks, as they
must apply for the federal funds and set up new programs.
Thursday's report could help shed light on whether the
expiration of the extra $600 a week in benefits discouraged
individuals from applying for benefits last week.
"Taking that temporary job may be more attractive when the
benefits are lower," said Julia Pollak, economist at job site
There are signs the battered labor market is healing and likely
past the worst of the crisis. Employers added 1.8 million jobs in
July, the third consecutive month of hiring. The jobless rate fell
last month to 10.2% after peaking near 15% in April.
Tara McCracken, Goodwill Industries International Inc.'s
director of workforce development in northwest North Carolina, said
the agency has seen greater demand for its job-search programs
within the past two months.
"They want to get to work," Ms. McCracken said, noting job
openings in the leisure-and-hospitality industry -- the lifeblood
of Asheville, North Carolina's economy -- have been scarce, but
appeared to tick up last week.
The job-market recovery is far from complete and employment
gains have yet to restore half of the jobs lost due to the
"The loss of jobs was very, very immediate, and many companies
cut as much as they possibly could right away and further cuts are
like amputations," Ms. Pollak said. "Those are cuts that speak to
the long-term viability of these companies."
A Cornell University survey showed about 31% of workers who were
placed back on payrolls after an initial layoff were laid off a
Fort Lauderdale, Fla. resident Zack Matthews has lost his job
multiple times in recent months. Mr. Matthews was laid off from his
creative director position at a telecommunications company in
When his unemployment benefits didn't come through, Mr. Matthews
picked up a job as an overnight manager at a bar and grill in late
June, but he was laid off two weeks later.
Mr. Matthews started a new job at the end of July as a
production manager at a photo and video studio. His unemployment
benefits arrived in two lump-sum payments at the beginning of
August, four months after he had first applied for them.
"It's been quite a year," Mr. Matthews said.
Kim Mackrael contributed to this article.
Write to Sarah Chaney at email@example.com
(END) Dow Jones Newswires
August 13, 2020 05:44 ET (09:44 GMT)
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