As the growing cases of coronavirus have put pressure on some states to turn the tide and reimpose termination orders on companies, 1.3 million workers filed new claims for state unemployment benefits last week, the government reported on Thursday.
The number of new claims has been decreasing since the beginning of April, but the weekly total is still well above the records of previous crises.
Another million new complaints were filed last week under the federal pandemic unemployment assistance program, designed to channel unemployment benefits to freelancers, self-employed workers and other workers normally ineligible for state unemployment insurance.
Hiring across the country has increased in recent weeks, and the overall unemployment rate fell in June to 11.1%, from a peak of 14.7% in April. But most of the payroll gains were due to the rehiring of temporarily laid-off workers. The number of workers whose previous jobs have disappeared and who need to look for new ones has increased.
"Your circumstances may be more difficult to correct than those that were dismissed because of a temporary closure," said Elizabeth Akers, an economist on the staff of President George W. Bush's Council of Economic Advisers. “Finding new jobs will be more difficult. There were scars on the economy. "- Patricia Cohen
Emergency government assistance in the form of expanded unemployment benefits and small business loans has been instrumental in keeping the economy up, said Lisa D. Cook, professor of economics and international relations at Michigan State University. But she worries about what will happen when expanded unemployment benefits expire later this month and other assistance programs run out.
"At the heart of that is job loss," said Cook, who testified before a congressional committee this week. State and local governments are laying off health and education professionals, eviction bans are expiring, although a significant portion of tenants and domestic businesses are having trouble making payments.
"I just worry about all of this building up in the system," she said, "and if we don't keep an eye on it now, we could end up with something worse than 2008."
Airlines announced this week that they could lay off or grant tens of thousands of employees in October, despite billions of dollars in government aid because air travel has not recovered. And even in cities where the number of coronavirus cases has declined, consumers continue to significantly reduce their purchases and meals. – Patricia Cohen
Although the state's new unemployment claims dropped slightly last week, the number of people applying for benefits under Federal Pandemic Unemployment Assistance has increased, topping one million for the first time since May.
Considering these records, the total of new unemployment claims was practically stable last week and rose from the mid-June lows.
Congress created the emergency program in mid-March to extend benefits to independent contractors, self-employed workers and others who do not qualify for regular state unemployment insurance. The effort started slowly: many states struggled to launch the program while dealing with a record number of regular unemployment claims. Unemployed workers across the country reported finding blocked websites, lost documents and confused or contradictory instructions.
These problems have spread to the data itself. Processing backlogs, data entry errors and other problems have made it difficult to know how many people are receiving benefits in the program or exactly when their claims were first registered. At least some states appear to be counting the same recipients several times.
But economists say there is little doubt that the program is helping millions of workers who typically fall into the unemployment safety net. More than 10 million people have filed lawsuits under the program, which is set to expire at the end of the year. – Ben Casselman
With millions of Americans unemployed due to the coronavirus pandemic, recent workplace data points to the divide between temporary and permanent layoffs. At ZipRecruiter, for example, the number of new jobs posted decreased last week for the fourth consecutive week.
"Recent job reports are encouraging, but the increase in employment fully reflects the hiring of workers on temporary layoffs," said Julia Pollak, labor economist at ZipRecruiter. "The recovery of new hires has not yet begun."
Peculiarities in counting combined with a sieve of accumulated unemployment claims can artificially inflate the total number of individuals who are unemployed. The June unemployment report showed 15 million fewer jobs than in February. AN Department of Labor Report on Thursday it showed that 18 million people were collecting state unemployment insurance in the week ending June 27.
Even more confusing the picture last week was the Fourth of July holiday and a four-day work week, which may have prevented the total number of complaints.
In any case, however, the damage to the country's labor market is still impressive, and the improvements in the economy have been lukewarm and uneven. The Organization for Economic Cooperation and Development said this week that high unemployment would likely persist in the United States and other developed countries at least until 2022. – Patricia Cohen
More than 117,000 people applied for unemployment benefit in Texas, last week, a jump of more than 20,000 compared to the previous week. It was the second consecutive weekly increase and the highest number of new orders since late May, although it is still below the peak in early April.
Economists are watching Texas closely because it is one of several states where a jump in coronavirus cases has led to a new round of business closings and other restrictions. Recently, a wide range of indicators has suggested that the economic recovery is losing momentum in states where virus cases are increasing rapidly.
Thursday's unemployment data did not show a clear picture. New records fell in Oklahoma, Florida and other virus hotspots, and increased only slightly in Arizona. Complaints have increased in New Jersey and New York, states where the virus is comparatively under control. And economists warn against reading overly weekly changes to state records, which can be volatile. – Ben Casselman
The Mecklenburg Paint Company in Charlotte, N.C., is one of the companies that has managed to re-hire workers temporarily laid off because of the coronavirus pandemic.
The spring painting season was starting when the coronavirus arrived, said Liz Etheredge, executive director of Mecklenburg, a family business started more than three decades ago by her late husband.
"Oh, God, things practically stopped," said Etheredge, whose company also deals with property management.
She helped most of her 30 employees apply for unemployment benefits, which she said is time-consuming and confusing. "One day, I waited three hours on hold to find someone," with the state to resolve failures in claiming benefits, she said, "and then another day, I waited two hours."
She applied for a federal loan from the Payment Protection Program, hoping to avoid firing painters permanently.
"It arrived just in time," said Etheredge, who was able to avoid spending his savings.
She put everyone back on the payroll, paying with the loan money and therefore hopes that the entire amount will be forgiven.
"I only care about how this country is going to pay everything back," she said. – Patricia Cohen
Wall Street faced another day of unstable trading on Thursday, with stocks fluctuating from gains to losses, as investors assessed the latest data on unemployment claims in the United States.
The S&P 500 was slightly lower in the middle of the morning, after an initial gain. Shares in Europe were mostly higher, led by Germany's DAX.
On Thursday, the state's unemployment compensation claims were below expectations last week. Data from the Department of Labor showed that 1.3 million people sought benefits last week, below the 1.37 million expected by economists and below 1.43 million last week.
Although new claims in the Department of Labor count have been on the decline since early April, the weekly total has not dropped below one million since the coronavirus pandemic began – levels well above previous records. Still, the steady decline can be considered good news for those who expect records to remain high or even increase because the recent rise in new coronavirus cases has prompted some states to reimpose shutdown orders.
Increase in shares in Europe, the technology giant SAP gained almost 8% after it reported that revenues and operating profit increased slowly in the second quarter. Germany-based software maker SAP said software license revenue, the main source of revenue, "recovered more than expected" in the quarter. Operating profit increased by 7%.
Technology stocks have led the market rally recently, as they are seen as benefiting from the changes brought about by the coronavirus pandemic – with more people working from home and buying online. They are also well isolated from the economic crisis because of large stocks of money. On Wednesday, Apple, Microsoft, Amazon and Facebook all hit records.
In China, the Shanghai compound rose 1.4% – its eighth consecutive daily gain – leading other Asian markets. China has been encouraging more people to buy stocks, pointing out possible bargains when the world's second largest economy emerges from the pandemic. – Kevin Granville and Mohammed Hadi
Football boots, a large British pharmacy chain, said on Thursday it plans to lay off more than 4,000 people, about 7% of its workforce, by closing optician stores and reorganizing its headquarters. In the last quarter, Boots UK sales fell 27.7%. Besides that, John Lewis, a British retailer, said it would permanently close eight department stores, leaving 42 stores and putting 1,300 jobs at risk.
Sur La Table, the luxury kitchenware company, filed for Chapter 11 bankruptcy on Wednesday. In lawsuits, the company said it hoped to sell more than half of its locations to Fortress Investment Groupand it would also close 51 of its 121 stores in the U.S.
Bed Bath and Beyond said on Wednesday, it would permanently close 200 stores in the next two years, starting later this year, while trying to tackle the coronavirus pandemic. The retailer said sales fell nearly 50% in the last quarter, despite the increase in online sales.
When you are essentially confined to your home for weeks, you have a lot of time to think.
Paul B. Brown, in an essay for the Times, says that, after thinking more about the health and safety of his friends and family, he found himself obsessed with his own finances: like so many others, he had a big problem.
As a freelance writer, he says, he lost most of his income almost overnight, putting him in the same situation as tens of millions of people whose wages have disappeared.
As he followed the financial advice reported years ago, he was in no shape, he says, with an emergency fund and a respectable part of his portfolio in medium-term bond mutual funds, which held up well while the stock market collapsed.
But now he decided to learn from this crisis and make some important adjustments to his finances. Among its resolutions: keep more money available, work harder to reduce debt, plan how to use Social Security payments and try to save more.