Business

New unemployment claims remain high at 860,000

They've dropped in past few months

A help-wanted sign hangs on the door of a Target store in Uniontown, Pa., earlier this month. Hundreds of thousands of A
A help-wanted sign hangs on the door of a Target store in Uniontown, Pa., earlier this month. Hundreds of thousands of Americans likely applied for unemployment benefits last week, a high level of job insecurity that reflects economic damage from the coronavirus outbreak. (Associated Press)

Another 860,000 Americans applied for unemployment insurance claims last week — a sign that layoffs nationwide remain high six months into the pandemic.

And 659,000 people had claims processed for Pandemic Unemployment Assistance, the program for self-employed and gig workers. That’s a drop of about 200,000 after those numbers had risen for weeks.

The total number of people claiming unemployment insurance went up by about 100,000, to 29.7 million, as of Aug. 29, the most recent week available for this statistic.

The number of new unemployment claims have come down gradually over the past few months, and they remain above the historic levels from before the pandemic, a sign of the continued economic head winds facing the country.

Joe Brusuelas, the chief economist at RSM, wrote that the continued high levels of unemployment claims were a “reflection of the deep scarring in the domestic labor market and economy.”

“The pace of firings in the U.S. economy remains well above anything observed during the Great Financial Crisis,” he noted in his post on RSM’s blog.

Companies announcing layoffs in the past week include Collins Aerospace parent Raytheon Technologies, which announced plans to cut 15,000 positions; Los Angeles National Public Radio-affiliate KCRW; Orlando, Fla.-based theme park SeaWorld; and restaurant chain Dave and Busters.

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Economists have been warning about a threat of a downturn in the recession since Congress failed to renew some of the hundreds of billions of dollars of aid programs that many credited with stabilizing the economy earlier in the pandemic.

The supplemental $600 in unemployment insurance expired at the end of July, and has been bolstered by $300 a week payment authorized by President Donald Trump.

That payment is expiring or will expire soon in most states, after lasting for about six weeks. (See Iowa-related story on this page.)

Retail sales rose just 0.6 percent last month, according to the U.S. Commerce Department — the fourth consecutive month of growth, but the rate has slowed significantly from July.

On Wednesday, the Federal Reserve updated its economic projections, predicting unemployment would fall to 7.6 percent by the end of the year, and 5.5 percent by the end of 2021.

“The recovery has progressed more quickly than generally expected,” Fed Chairman Jerome H. Powell said at a news conference.

“Even so, overall activity remains well below its level before the pandemic, and the path ahead remains highly uncertain.”

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