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Jobless Claims Rise for the First Time Since the Pandemic Swept the US in March

Jobless claims have risen for the first time in nearly four months.

According to the Labor Department, about 1.4 million Americans filed for unemployment benefits in the week ended July 18 — an increase of 109,000 from the previous week’s revised level and higher than the 1.3 million expected by economists.

It marks the first week that the number of applications climbed since March, when the coronavirus pandemic swept the United States, and paints a troubling picture for economic recovery as a recent spike in COVID-19 cases threatens the country’s reopening.

In just over 15 weeks, a staggering 52.7 million people in the U.S. have filed initial jobless claims. New filings were the highest in California, which saw upwards of 292,000 applications, as well as Florida and Georgia, with each reporting more than 100,000 claims last week. All three states have seen a surge in infections in recent weeks, leading state and local governments to reinforce lockdown restrictions.

The uptick also comes a week before millions of people in the U.S. will no longer be able to claim the additional $600 a week in unemployment benefits on top of what they get from their state, which averaged about $372 a week at the end of February. The funding, which is part of the $2.2 trillion Coronavirus Aid Response and Economic Security Act, or CARES Act, was introduced at the end of March as the pandemic took hold in the country.

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If policymakers fail to enact an extension, the program will expire on July 31 as scheduled. The White House has expressed support for another stimulus measure to bolster the economy: The new round of payments would be less than the benefits provided in the CARES Act, which allotted $1,200 to eligible Americans, $2,400 for married couples and an additional $500 for each child under the age of 17.

Employers and workers face an uncertain future due to the health crisis. In the first three months of the year, the U.S.’s gross domestic product — which represents the output of U.S. goods and services — contracted at a seasonally adjusted annual rate of 5%. Although nonfarm payrolls improved by 4.8 million in June and the unemployment rate declined to 11.1%, the number of permanent job losers still surged by 588,000 to 2.9 million.

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