AP

US jobless claims jump back above 1 million in face of virus

Aug 20, 2020, 6:44 AM
FILE - In this May 7, 2020, file photo, a person looks inside the closed doors of the Pasadena Comm...
FILE - In this May 7, 2020, file photo, a person looks inside the closed doors of the Pasadena Community Job Center in Pasadena, Calif., during the coronavirus outbreak. President Donald Trump’s plan to offer a stripped-down boost in unemployment benefits to millions of Americans amid the coronavirus outbreak has thus far found little traction among the states, which would be required to pick up a quarter of the cost to deliver the maximum benefit. (AP Photo/Damian Dovarganes, File)
(AP Photo/Damian Dovarganes, File)

WASHINGTON (AP) — The number of laid-off workers seeking U.S. unemployment benefits rose to 1.1 million last week after two weeks of declines, evidence that many employers are still slashing jobs as the coronavirus bedevils the U.S. economy.

The latest figures suggest that more than five months after the viral outbreak erupted the economy is still weak, despite recent gains as some businesses reopen and some sectors like housing and manufacturing have rebounded. A rising number of people who have lost jobs say they consider their loss to be permanent.

The total number of people receiving unemployment aid declined last week from 15.5 million to 14.8 million, the government said Thursday. Those recipients are now receiving far less aid because a $600-a-week federal benefit has expired, which means the unemployed must now get by solely on much smaller aid from their states. The loss of the federal benefit has deepened the struggles for many, including a higher risk of eviction from their homes.

President Donald Trump has signed an executive order to provide $300 a week in federal unemployment aid, with money drawn from a disaster relief fund. Twenty-five states have said they will apply for the federal money, though they would need to revamp their computer systems to do so. Other states are still considering whether to take that step; two have said they won’t.

Some states may be hesitating to overhaul their unemployment systems because they expect Congress to eventually pass a new rescue package with an enhanced jobless benefit that might not require any changes.

In states that decide to pay out the $300, the government estimates it would take three weeks, on average, for the states to send the money to the unemployed. And initially only enough money is being allotted to cover three weeks of payments. Even with subsequent grants, analysts estimate that there would be enough money to last only five or six weeks.

The continuing stream of layoffs comes against the backdrop of a modest recovery from a deep recession and a virus that is still paralyzing much of the economy. Home construction and sales have bounced back. So have auto purchases. But spending on travel, entertainment and many other services remains weak. Small businesses are struggling. And unemployment, at 10.2%, remains elevated.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story is below:

The government will provide its latest snapshot Thursday of the pace of layoffs in the United States, which have declined steadily but remain stuck at a high level with the economy still in the grip of the viral pandemic that erupted in March.

The number of applications that were reported last week fell below 1 million after 20 straight weeks above that level. Yet at roughly 960,000, it was still painfully high. Before the viral outbreak, the weekly figure had never topped 700,000, even during the Great Recession.

The latest string of layoffs follows the expiration of a $600 weekly federal check that provided vital support for millions of laid-off Americans. Negotiations in Congress to extend that benefit, though at a lower level of payment, have collapsed. The Trump administration is offering a new $300-a-week federal benefit, which states need to apply for and must revamp their computer systems to accommodate.

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US jobless claims jump back above 1 million in face of virus