WASHINGTON (AP) – The number of people seeking unemployment benefits has risen to 965,000 in the past week, the most since the end of August and a sign that the resurgent virus is likely to increase redundancies.
The latest figures for unemployment claims, released by the Labor Department on Thursday, remain at levels never seen before the virus struck. Before the pandemic, weekly applications usually numbered about 225,000. They rose to nearly 7 million last spring after nationwide shutdowns took effect. Applications have declined during the summer, but since September it has been above 700,000.
The high rate of layoffs coincides with an economy that has weakened as consumers have not demanded travel, shopping and dining out in the face of rising viral consequences. More than 4,300 deaths were reported on Tuesday, another record high. The shutdown of restaurants, bars and other places where people gather in California, New York and other states has probably forced layoffs.
Some states and cities resist closures, partly for fear of the economic consequences, but increases the risk of further infections. Minnesota allowed this week to be eaten in person. Michigan is ready to do the same. Some bars and restaurants in Kansas City extend their hours.
Economists believe that once coronavirus vaccines become more widespread, a broader recovery should take hold in the second half of the year. Biden’s incoming government, along with a now fully democratic House and Senate, is expected to deploy more bailouts and spending measures that could accelerate growth.
Yet many analysts are also concerned that people most affected by the downturn are unlikely to soon benefit from millions of Americans still unemployed and as many as one in six small businesses no longer working.
“While the outlook for the economy is better later in 2021, the recovery of the labor market has taken a step backwards,” said Nancy Vanden Houten, an economist at Oxford Economics.
Last week’s applications for assistance could perhaps have been increased in part because the civil service office was closed during the holidays, requiring unemployed people to wait until last week to apply. The addition of a $ 300-a-week federal unemployment benefit as part of a rescue package introduced late last month may have encouraged more people to apply, Vanden Houten said.
Many people in the arts and entertainment fields lost most or all of their income because the coronavirus closed venues. These include Shelby Lewis, a classical trumpet player in Baton Rouge, Louisiana, who has not performed since early March when he played Bach in a music room in Kansas.
Lewis, 48, receives $ 400 a week in unemployment benefits, including the new federal benefit of $ 300, and his wife is still working. He appreciates the federal aid, for which freelance musicians like him have not been eligible before.
Lewis, however, fears that many classical music groups will close permanently, and he shifts his career back to photography and design, which he did for a decade before becoming a full-time musician.
“I think there’s going to be a decline in small local orchestras in general,” he said.
In addition to the first time it has applied for unemployment benefits in the past week, the government said on Thursday that 5.3 million Americans still receive state-free benefits, up from 5.1 million in the previous week. This indicates that fewer people who are unemployed find work.
About 11.6 million people received unemployment benefits from two federal programs in the week ending December 26, the most recent period for which data is available. One of the programs offers extensive benefits to people who have exhausted their state aid. The others offer benefits to the self-employed and contract workers.
These two programs expired at the end of December. By mid-March, they are too late to renew in the $ 900 billion rescue package that Congress approved and signed President Donald Trump into law. This legislation also included $ 600 for most adults and a supplemental unemployment benefit of $ 300 per week. Congress Democrats prefer to increase the checks to $ 2,000 and to extend federal aid beyond March, just like President-elect Joe Biden.
The weakness of the US labor market was painfully made clear in the December job report issued by the government last week. Employers shed jobs for the first time since April when the pandemic strengthened its grip on consumers and businesses.
The figures also depicted a sharp unequal labor market: The losses last month were concentrated among restaurants, bars, hotels and entertainment venues – places that provide personal services that some governments restrict or that consumers avoid. Educational services, mostly colleges and universities, also cut off employees in December. So do film and music studios.
However, most other large industries have achieved job growth. Many economists last spring expected job losses to spread to more industries. Although all sectors of the economy initially resigned, most of them avoided deep job cuts. Manufacturing, construction and professional services such as engineering and architecture, for example, added all posts in December.
At the same time, it seems that many companies are reluctant to replenish the lease quickly. A government report on Tuesday showed that employers advertised fewer public jobs in November as in October. The decline, although small, was widespread in most industries. Even now, the country has nearly 10 million fewer jobs than it had before the pandemic sent the economy into a deep recession almost a year ago, after recovering only 56% of jobs in the spring.
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AP business writer Alexandra Olson contributed to this report from New York.