1.2 million seek jobless aid after $600 federal check ends

WASHINGTON (AP) — Nearly 1.2 million laid-off Americans applied for state unemployment benefits last week, evidence that the coronavirus keeps forcing companies to slash jobs just as a critical $600 weekly federal jobless payment has expired.

The Labor Department’s report Thursday marked the 20th straight week that at least 1 million people have sought jobless aid. Before the pandemic hit hard in March, the number of Americans seeking unemployment checks had never surpassed 700,000 in a week, not even during the Great Recession of 2007-2009.

The new jobless claims were down by 249,000 from the previous week after rising for two straight weeks.

The pandemic, the lockdowns meant to contain it and the wariness of many Americans to venture back out to eat, shop or travel have delivered a devastating blow to the economy despite the government’s emergency rescue efforts. The nation’s gross domestic product, the broadest measure of economic output, shrank at an annual rate of nearly 33% from April through June. It was by far the worst quarterly fall on record, though the economy has rebounded somewhat since then.

On Friday, the government is expected to report a sizable job gain for July — 1.6 million. Yet so deeply did employers slash payrolls after the pandemic paralyzed the economy in March that even July’s expected gain would mean that barely 40% of the jobs lost to the coronavirus have been recovered.

And the pace of hiring is clearly slowing. A resurgence of cases in the South and the West has spread elsewhere and upended hopes for a speedy economic recovery as bars, restaurants and other businesses have had to delay or reverse plans to reopen and rehire staff.

All told, 16.1 million people are collecting traditional unemployment benefits from their state. For months, the unemployed had also been receiving the $600 a week in federal jobless aid on top of their state benefit. But the federal payment expired last week. Congress is engaged in prolonged negotiations over renewing the federal benefit, which would likely be extended at a reduced level.

In the meantime, millions of the unemployed suddenly have less money to pay for essentials. Many of them are among the 23 million people nationwide who are at risk of being evicted from their homes, according to The Aspen Institute, as moratoriums enacted because of the coronavirus expire.

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

With the nation still gripped by an alarming resurgence of coronavirus cases, the U.S. government will provide its latest snapshot Thursday of the layoffs that have remained elevated at a weekly pace above 1 million since the pandemic erupted in March.

The rate of applications for unemployment benefits has stalled at roughly twice the record high that had existed before the virus sent the economy spiraling into a recession. With many states and localities having re-imposed lockdowns in response to the spreading virus, businesses face renewed struggles that have forced some to impose further job cuts or to shut down.

The latest string of layoffs follows the expiration of a $600 weekly federal jobless payment that provided critical support for many of the unemployed. Members of Congress are locked in prolonged negotiations over a new rescue aid package that might extend that unemployment benefit, though likely at a lower level of payment.