Unemployment Claims Show Layoffs Continue to Batter Economy – The New York Times

More than five months after the coronavirus pandemic began throttling the economy, layoffs remain widespread, the government reported Thursday, the latest sign of the labor market’s painstakingly slow recovery.

Last week, 833,000 workers filed new claims for state unemployment benefits, while 759,000 new claims were filed by freelancers, part-time workers and others under a federal program called Pandemic Unemployment Assistance. Both figures, which are not seasonally adjusted, were increases from the previous week.

“It’s pretty bad at this stage in the crisis,” said Gregory Daco, chief U.S. economist at the forecasting firm Oxford Economics. “I feel like this is a very fragile labor market at a critical juncture.”

There has been progress from the early days of the pandemic, when weekly tallies of new claims surged past six million. But recent improvements have been more arduous.

Of the 22 million jobs lost in March and April, more than nine million have been regained. And most analysts expect that the monthly jobs report, scheduled for release on Friday, will show a dip in August from double-digit unemployment rates.

But the damage to the economy has been wide and deep. As of mid-August, more than 29 million Americans were receiving some sort of unemployment insurance.

The report on Thursday was the first to be affected by a change in the way the Labor Department accounts for predictable seasonal patterns, like temporary holiday workers who are laid off in January.

The seasonally adjusted figure for the week was 881,000. The number looks much lower than the previous week’s adjusted figure of just over one million, but the drop can be attributed to the altered methodology. Because the change means seasonally adjusted numbers cannot be compared with those tallied until now, The Times is emphasizing the unadjusted figures.

The unadjusted number of 833,000 last week was an increase from 826,000 the week before.

Mr. Daco said he was particularly concerned about the increase last week in new claims for Pandemic Unemployment Assistance, the program for those generally ineligible for state jobless benefits. The total of 759,000 was up from 608,000 a week earlier.

“It could reflect a weakening economy in some of the states worst impacted by the health crisis,” he said, “or it could be that some of the workers that had returned are finding that it’s not possible or sustainable to return to their primary economic activity in the current environment.”

Some businesses are hiring. Postings at the job search site Indeed rose slightly last week, although the total is still more than 20 percent below what it was this time last year.

The hospitality, tourism, and sports and fitness sectors are in the worst shape, with postings down more than 40 percent from where they were a year ago. Listings for higher wage jobs in banking, finance and software development are also much more scarce.

Construction, driving and warehouse jobs seem to be the most plentiful.

The job site ZipRecruiter has seen a gradual increase in job listings over the past couple of months, but the pace of growth began to slow in mid-August, said Julia Pollak, the company’s economist.

Consumers pulled back on spending after a $600 weekly jobless benefit supplement ceased in July. At the same time, many small businesses are running out of the money they received through the federal Paycheck Protection Program.

A recent survey from the National Federation of Independent Business found that one out of five small-business owners said they would have to shut down if economic conditions did not improve in the next six months.

The Labor Department report provided no fundamental change in the jobs picture that would resolve the stalemate between Republicans and Democrats in Congress over a new economic relief package.

With the end of the $600-a-week jobless benefit supplement, most states are moving ahead with plans to provide unemployed workers with a temporary replacement: a weekly $300 supplement paid out of federal disaster relief funds.

As of Wednesday, 45 states had applied for a grant from the Federal Emergency Management Agency. Six of those — Arizona, Louisiana, Missouri, Montana, Tennessee and Texas — have started paying out benefits, according to the Labor Department, but a vast majority have not.

Most will probably not be able to gear up to start payments until mid-September or later. The supplement is expected to last four or five weeks.

South Dakota is the only state that has confirmed it is not taking part. Gov. Kristi Noem says her state doesn’t need the money.

A handful of states, including Kentucky, Montana and West Virginia, have plans to boost the supplement with an additional $100.

Economists say the extra jobless benefit is crucial to the economy’s recovery. “The data are showing us that the expiration of the supplemental benefits is having a clear impact on consumption,” said Carl Tannenbaum, chief economist at Northern Trust. “As a result the momentum of the economic recovery seems to be slowing as we move to the end of the third quarter.”

The big question, Mr. Tannenbaum said, is whether Congress can respond effectively. “Are we going to build a bridge of sufficient length to get to the post-Covid environment without permanent economic damage?” he asked.

Karen Kent hopes that this will be the last week she will have to file a jobless claim. A cafeteria worker at a local high school in Pennington, N.J., Ms. Kent, 47, was laid off in early March as schools began closing in response to the coronavirus crisis.

Last week, she got a call telling her she was the one cafeteria worker from her school going back to work. Her first shift is supposed to start Wednesday.

Her husband, who works for a fire protection service company, was able to hold on to his job, but because he works on commission, his income has been unpredictable.

“The $600 is the only reason we stayed afloat,” Ms. Kent said of the weekly federal supplement, which lapsed at the end of July. Without it, her state benefits came to $157. “We’re at the stage where we’re pretty lean.”

She and her husband live in affordable housing, and they have twice deferred their monthly mortgage payment of $537 and condo association fee of $234. Then there’s the $185 they owe to Verizon and $457 in unpaid medical insurance bills.

Ms. Kent was glad she was called back to her $11.40-an-hour job. But she has asthma and a heart condition and is concerned about her exposure to the virus while working at a school.

“I’m terrified because I don’t know if I’m going to have enough protection,” she said. “But you have to do what you have to do to pay the bills.”

Others are still waiting for the chance to return to work.

Whitney Anne Adams, 34, a freelance costume designer for film in Astoria, Queens, has been out of work since mid-March.

It took seven weeks for unemployment benefits to start arriving. And without the $600 jobless benefit supplement, she has been relying on her credit card since August. She said she now owed $15,000.

Ms. Adams, who has two rare blood disorders, had to go into debt before, for medical expenses. It took multiple jobs over more than a decade, sometimes working 100 hours a week, to pay off the $25,000 she owed. Finally, in February, she was debt-free for the first time in 12 years.

One month later, the pandemic hit, and she was back where she started.

“I’m most worried about going back to that pit of debt again,” she said.

Ben Casselman contributed reporting.