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Jobless Claims Are Staying Stubbornly High — Here’s Why Things Could Get Worse for Retail

Jobless claims remained higher than expected last week, as the coronavirus continues to impact businesses throughout the U.S.

According to the Labor Department, first-time jobless claims for the week ended Sept. 5 totaled 884,000, matching the previous week’s level, which was revised up from 881,000 to 884,000. Economists had hoped to see the number drop down to 846,000 new applications.

What’s more, continuing claims, which paints a broader picture of unemployment in the country and lags jobless data by one week, increased slightly to 13.39 million.

The Bureau of Labor Statistics reported that the unemployment rate fell in August to 8.4%. That was a welcome departure from the 14.7% high seen in April, when much of the country went into lockdown to try to contain the spread of the coronavirus; however, it is still significantly higher than pre-pandemic levels, which typically hovered in the mid-3% range.

And workers in the retail and footwear industries are continuing to feel the impact of the economic recession caused by the coronavirus.

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Just this week, the Mall of America in Bloomington, Minn., confirmed that 211 workers across various departments will permanently lose their jobs at the end of the month. An additional 178 people will remain on furlough, which could extend beyond Sept. 30.

And Baltimore-based athletic brand Under Armour also announced that it plans to cut about 600 jobs primarily in its “global corporate workforce.” Meanwhile, Century 21 today added its name to the growing list of retailers seeking Chapter 11 protection. The discount department store plans to completely liquidate its 13 stores across New York, New Jersey, Florida and Pennsylvania, which could push even more retail workers onto unemployment.

To help unemployed Americans stay afloat, the federal government had been providing an extra $600 per week Pandemic Unemployment Benefit through the CARES Act, which was signed into law in late March. (That $600 a week was on top of state benefits, which averaged $372 a week in February.) However, that program expired at the end of July, and Washington lawmakers were not able to come to an agreement on whether to modify or continue the weekly benefits.

As a stop-gap, President Donald Trump approved “Lost Wages Assistance” grants which are being administered to states through the Federal Emergency Management Agency and pay $300 per week on top of an individual’s regular unemployment benefit.

As of press time, 48 states, as well as the District of Columbia and Guam, have been approved for the grants from FEMA.

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