The job market is once again showing signs of weakening as more Americans apply for unemployment benefits amid a surge in coronavirus cases and new restrictions on businesses aimed at curbing outbreaks.
The Ministry of Labor reported on Thursday that the state’s first unemployment insurance claim increased by more than 18,000 last week to more than 743,000 before adjusting for seasonal factors. This was the first increase since early October and represented an ominous shift for the labor market, which struggled to fully recover from the massive furlough associated with the arrival of the March pandemic.
Gregory Dako, Chief US Economist at Oxford Economics, said: “The latest data show the vulnerability of recovery as the Covid crisis worsens.” If this trend continues, it indicates that the labor market recovery has reversed. “
A total of 320,000 new claims for pandemic unemployment support, a federal program for gig workers, independent contractors and self-employed, up 24,000 from the previous week.
The economy recovered strongly in the third quarter and overall unemployment fell to seasonally adjusted 6.9% in October, but that momentum diminished due to the lack of new assistance from Washington.
The latest wave of outbreaks could further devastate large corporations such as airlines, restaurant chains and hotels, and the Centers for Disease Control and Prevention is urging Americans to avoid traveling on Thanksgiving vacations on Thursday. I will.
According to Torsten Slok, Chief Economist at Apollo Global Management, mobility (walking, driving, and public transport) is already declining, as is restaurant reservations.
“If people are at home, that means they aren’t shopping or going out, which means less employment,” he said.
In addition, two emergency federal programs to help those who have lost their jobs due to a pandemic will expire at the end of next month.
According to a new study by the Progressive Century Foundation, 7.3 million workers will lose their benefits when pandemic unemployment support ends. An additional 4.6 million people will be separated from pandemic emergency unemployment compensation. This starts when the state’s employment benefits run out.
Andrew Stettner, Senior Fellow of the Century Foundation and co-author of a study with Elizabeth Pancotti, describes the program as “the last lifeline available to millions of Americans in desperate need.” I am. “It will be a catastrophic end to one of our darkest years.”
According to another study by the California Policy Lab, a research group working with state and local governments, nearly 45% of California workers have applied for unemployment benefits since March, during which time the black workforce 83% applied. Many of those workers are back to work, but the end of the two programs will affect 750,000 Californians.
According to many economists, the new aid package from Washington will provide significant economic support for now. However, stimulation methods have been hampered by their different scales.
On Monday, presidential election Joseph R. Biden Jr. called on both parties to “join” and enact stimulus measures in line with a $ 3 trillion proposal passed by the Democratic-controlled House of Representatives. .. Republican leadership in the Senate is backing $ 500 billion in spending.
Consumer demand remains relatively healthy for all the blows last year, according to Michelle Meyer, head of the US economic sector at Bank of America. “Housing remains incredibly strong and car sales continue to be strong,” she said. “Consumers are still investing in high-value products.”
The National Association of Real Estate Agents reported Thursday that existing home sales saw the highest growth in 14 years last month, boosted by solid interest rates that helped home hunters borrow and buy.
A Dickensian element of the Covid-19 economy, the unemployed who are facing a benefit cutoff despite other Americans buying homes worth hundreds of thousands of dollars, are recovering Emphasizes non-uniformity.
Low-wage service workers have been hit particularly hard, and the rise in virus cases threatens new pain. White-colored workers were much better, with college graduates having an unemployment rate of only 4.2%.
Even the workers who find a job, the economy presents a forbidden challenge. Some, like Christopher Crystal, had to settle for a salary that was only a small part of what they had previously earned.
Crystal, 45, was dismissed in March from his job as a logistics manager at John F. Kennedy International Airport in New York, where he worked for 11 years and oversaw 500 staff.
His furlough turned into a permanent furlough in September, and the $ 400 he received weekly from the state unemployment allowance was $ 1,500 for a Long Island apartment, $ 250 for a car, and $ 250 for his family. It wasn’t enough to cover my monthly bill. For car insurance.
As credit card charges increased, Mr. Crystal began looking for jobs that would pay more than unemployment allowances.
In early October, he found a job as an Amazon delivery driver. But he earns $ 40,000 a year instead of his previous $ 70,000 salary. This job requires a 10 to 12 hour shift to lift heavy boxes.
“I’m taking all the overtime they can give me just to catch up,” he said.
Crystal is happy to receive the job of providing additional cash to buy clothes for her five-year-old son. But he feels he’s suffering from debt from the bills he’s piled up while he’s not working yet.
“Now our savings are exhausted and my credit score is crazy falling,” he said. “It takes a long time to dig yourself out of this hole.”
Gillian Friedman contributed to the report.
Unemployment allowance increases as economic instability increases
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