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Road to Labor Market Recovery Is Long as Jobless Claims Exceed 1 Million Again

The United States labor force faces a long and tough recovery as the number of Americans who applied for unemployment benefits once again topped 1 million.

According to the Department of Labor, 1.1 million workers filed jobless claims on a seasonally adjusted basis in the week ended Aug. 15, an increase of 135,000 from the previous week’s revised level. Economists, who were hoping for a second consecutive week of fewer than a million applications, expected 920,000 filings.

The data also showed that continuing claims, which paints a broader picture of joblessness in the country and lags jobless data by one week, remained high at 14.8 million.

Last week, the agency reported that about 963,000 people submitted initial jobless claims in the week ended Aug. 8. It marked the lowest total of first-time applications since the coronavirus pandemic shut down the American economy and the first time in five months that fewer than a million sought unemployment insurance benefits. (Prior to the coronavirus pandemic, weekly claims averaged at about 220,000.)

However, the labor force remains fragile as COVID-19 cases persist in many states and a second stimulus measure has reached a standstill in Congress.

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Over the past few months, many employers facing cash shortfalls amid widespread closures resorted to mass furloughs or layoffs to keep their businesses afloat. Although state and local officials have largely moved forward with their reopening plans, a surge in new infections — particularly in the South, West and parts of the Midwest — have resulted in reinforced restrictions. In certain areas, stores and offices that had just begun to rehire their workers shut down once again, pushing more Americans back to unemployment.

What’s more, the crucial $600 in additional weekly unemployment benefits — part of the CARES Act signed into law in late March — expired at the end of July. In the meantime, President Donald Trump has signed executive orders addressing unemployment benefits, an extension of the federal moratorium on evictions, a payroll tax holiday and the deferment of student loan payments through 2020. However, Senate Republicans and House Democrats remain at an impasse on what’s to be included in the next package, including another round of $1,200 in direct payments to financially vulnerable Americans.

Michael Atmore; Iris Apfel; Ron Fromm, Sponsored By FFCF

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