Image: US Department of Labor Building. Source: Small and Medium Business Administration.
Washington (AP) — The number of Americans applying for unemployment benefits increased to 778,000 for the second straight week last week. This shows that the US economy and job market continue to be tense as coronavirus cases surge and cold climates increase risk.
Unemployed claims increased from 748,000 last week, according to a report by the Ministry of Labor on Wednesday. Prior to the virus’s rampage in mid-March, weekly bills were typically only around 225,000. They fell after a surge to 6.9 million in March, but have remained at historic highs for more than eight months and many companies are unable to fully resume.
The surge in virus incidents is increasing pressure on businesses and individuals. As states and cities impose restrictions on their businesses, the economy is at greater risk of a “double-bottom” recession.
Rubela Farooqi, Chief US Economist at High Frequency Economics, said: “Despite continued employment growth, the labor market is still under stress and far from a full recovery.”
The total number of people who continue to receive traditional state unemployment benefits has dropped from 6.4 million last week to 6.1 million. That number has been declining for months. It shows that more Americans are finding jobs and are no longer receiving unemployment assistance. But it also shows that many unemployed have run out of state unemployment assistance. It usually expires after 6 months.
More Americans are collecting benefits under a program established to relieve the financial distress of a pandemic. In the week of November 7, the number of people collecting benefits under the Pandemic Unemployment Assistance Program (providing compensation to gig workers and others not qualified for traditional assistance) increased by 466,000 to 9.1 million. became.
In addition, the number of people receiving assistance under the Pandemic Emergency Unemployment Compensation Program, which provides 13 weeks of federal benefits to those who have run out of state unemployment benefits, has increased by 132,000 to 4.5 million. ..
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Overall, nearly 20.5 million people receive some form of unemployment assistance. (The figures for the two pandemic-related programs are not adjusted for seasonal fluctuations.)
An intensifying pandemic could accelerate the pace of furloughs as more states and provinces limit public gatherings and reduce the time and capacity required for restaurants, bars and other businesses. Regardless of what the government does, many Americans may stay home and stay away from local businesses until they feel safe again.
The Conference Board reported on Tuesday that consumer confidence weakened in November and fell as expectations fell for the next six months.
Data company Womply said 21% of SMEs were closed earlier this month, reflecting a steady increase from 16% in June. Womply found that private consumption by local businesses fell 27% this month from a year ago, worsening from a 20% year-on-year decline in October.
At the heart of the problem is the untamed virus. The number of confirmed infections in the United States has exceeded 170,000 per day, starting from less than 35,000 in early September. The arrival of cold in many countries can exacerbate the health crisis.
Meanwhile, another economic threat is imminent. With the two supplementary federal unemployment programs approaching the day after Christmas, the interests of 9.1 million unemployed could be completely lost. Congress has failed months to agree on new stimulus aids for the unemployed and struggling companies after the trillion-dollar bailout package enacted in March expired.
Most economists warn that without government assistance, individual, small business, local and state difficulties will deepen and services and jobs will have to be reduced.
Expiration of benefits makes it difficult for the unemployed to pay rent, buy food, and pay for utilities. Most economists agree that such assistance is effective in boosting the economy, as unemployed people tend to spend their profits quickly.
When the outbreak of the virus broke out in early spring, it flattened the economy at an alarming rate. Employers cut 22 million jobs in March and April, and the unemployment rate surged to 14.7%, the highest rate since the Great Depression.
Since then, the economy has regained more than 12 million jobs. Still, the country employs about 10 million less than it did before the pandemic.
Source: Associated Press