Unemployment benefits show slow recovery.
The number of Americans claiming state unemployment benefits dropped last week, but an impressive 31.3 million people were still receiving unemployment payments as of mid-July. This figure points to a stagnation in the labor market as the country grapples with a resurgence in COVID-19 cases that threatens the incipient economic recovery. Other data showed a 54% increase in the number of layoffs announced by employers in July. The reports come after a sharp decline in private payrolls in July and continued declines in employment in the manufacturing and service industries this week.
“Repeated shutdowns to contain the virus continue to threaten the labor market, which is already weak,” said Rubeela Farooqi of High Frequency Economics in White Plains, New York. “Without effective containment of the virus, the recovery remains at risk from continued job losses that could further limit revenue and spending,” he added.mInitial requests for state unemployment aid fell by 249,000 to a seasonally adjusted 1.186 million in the week to Aug. 1, the Labor Department said Thursday.
Requests remained well above the peak of 695,000 touched during the Great Recession of 2007-2009. Economists consulted by Reuters calculated 1,415 million orders in the last week. In another report released Thursday, Challenger, Gray & Christmas firm said the number of layoffs announced by US employers jumped 54% to 262,649 in July. “Consumers are buying fewer goods and services, businesses are closing and bankruptcies are increasing,” said Andrew Challenger, senior vice president at the firm.
“It is clear that many job losses are now permanent and it will be a challenge for many workers to find new jobs and feel secure accepting public-facing positions,” he added.