WASHINGTON (AP) – More than 1.3 million Americans applied for unemployment benefits last week, a historically high rate that shows that many employers are still putting people ahead of a reviving coronavirus.
The continuously increased level of dismissal occurs because a spike in virus cases has forced six states to reverse their approach to resuming business. These six – Arizona, California, Colorado, Florida, Michigan and Texas – make up a third of the US economy. Fifteen other states have canceled their reopens. All in all, the recall has halted a tentative recovery in the labor market and is likely to trigger further redundancies.
The total number of people receiving unemployment benefits decreased 700,000 to 18 million. This indicates that some companies continue to hire workers despite the fact that jobs have been reduced by other employers.
Another 1 million people applied for benefits last week under a separate program for self-employed people and players who have made them eligible for support for the first time. These figures are not adjusted for seasonal variations, so the government does not include them in the official number.
Americans seek unemployment benefits in the face of a disruptive force in confirmed viral cases, with increases reported in 38 states. The case has particularly accelerated in four states that now account for more than half of the new US cases: Arizona, California, Florida and Texas.
Applications for unemployment benefits fell last week in California and Florida, but in California they remained high, with more than 267,000 claims. There are more people who applied for unemployment benefits throughout the country each week before the pandemic hit. Unemployed claims also decreased in Michigan and Colorado.
Yet applications for benefits are nailed in Texas, Nevada, Tennessee and Louisiana – states where confirmed cases of the virus are intensifying. They also jumped in New Jersey and New York, where the pandemic is mostly under control.
The intensified outbreaks and stricter government restrictions have slowed down economic activity in much of the country and may weigh on employment. The government’s June job report showed a solid gain of 4.8 million jobs and an unemployment rate that fell to 11.1% from 13.3%.
Yet, the economy has recovered only about one-third of the jobs that disappeared in March and April. And the June job report reflected surveys of Americans conducted in the middle of that month – before the pandemic flared up again.
More recent data is worrying. Credit and debit card spending issued by Bank of America fell during the week ending June 27 compared to the previous weight, the bank says.
Restaurant visits have also been leveled nationally, even in states that have not started closing again, according to data from OpenTable, the reservation website.
“This suggests that renewed fear of the virus rather than government restrictions is driving the activity,” said Andrew Hunter, senior US economist at Capital Economics, a forecasting firm.
Kronos data, which produces scheduling software for small businesses, reinforces evidence that the recovery in the labor market is faltering.
During the week ending July 4, the redundancies among Krono’s customers actually increased and employment declined. Companies now show an average of almost three workers for each new job, the company’s data shows. These cuts reflect permanent job losses rather than temporary redundancies. This indicates that even when many companies remember workers from remote branches, they reduce their permanent wages.
And in the retail industry, the number of shifts shifted slightly last week after steady increases in previous weeks. David Gilbertson, vice president at Kronos, said this indicates that in many cases consumer demand has not taken enough to motivate more employees.
“Everything that will be open is open,” Gilbertson said. “Now we just need more people to come in and start spending money before things can get going again.”
Several companies have warned in recent days that more layoffs will follow. Levi’s, the iconic jeans manufacturer, said it will cut 700 business opportunities. United Airlines has warned 36,000 of its employees – almost half of the workforce – lost their jobs in October. (Airlines are not allowed to cut jobs until then as a condition of accepting billions of dollars in state rescue aid.)
The renewed threat of job loss arises just as a federal program providing $ 600 a week in unemployment benefits, in addition to the unemployment benefits provided by each state, expires at the end of this month. Congress leaders have said they will pick up some form of a new rescue package when lawmakers return later this month from a two-week recess.
Administrative officials have expressed support for further stimulus. But Senate Republicans have resisted extending $ 600 a week in unemployment benefits, largely because it discourages laid-off people from returning to work. The House Democrats have been pushing to extend $ 600 a week through January.