Jobless Claims Hit a Pandemic-Era Low — But the US Labor Force Is Still Suffering
The number of new unemployment applications hit a pandemic-era low but continued to hover over a million, signaling that the coronavirus is still weighing heavily on the United States labor force.
According to the Department of Labor, more than 1.18 million workers filed jobless claims in the week ended Aug. 1. It marked the lowest weekly total since March — when the COVID-19 outbreak forced many businesses and offices across the country to temporarily shut down — and a decrease of 249,000 from the previous week’s revised level.
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Separately, the data showed that continuing claims — which paints a broader picture of joblessness in the country and lags jobless data by one week — declined 844,000 to 16.11 million.
Last week, the Commerce Department reported that the U.S. gross domestic product dropped at a 32.9% annualized rate in the second quarter — a 9.5% fall from the prior year’s quarter and the steepest in records dating back to 1947. Before the health crisis pummeled economies around the world, the average U.S. GDP hovered at around 2%, but government-imposed lockdowns and stay-at-home orders led businesses to temporarily close their doors, curtailing production as well as consumer spending.
Although state and local officials have largely moved forward with their reopening plans, a surge in new COVID-19 infections — particularly in the South, West and parts of the Midwest — have resulted in reinforced restrictions. In certain areas, stores and offices that had just begun to rehire their workers shut down once again, pushing more Americans back to unemployment.
The week that the jobless claims data was recorded also coincided with the expiration of an additional $600 a week in unemployment benefits as part of the $2.2 trillion Coronavirus Aid Response and Economic Security Act, or CARES Act, introduced at the end of March. Congressional leaders and the White House failed to strike a deal before midnight on July 31.
However, a follow-up measure is currently being negotiated by Senate Republicans and the Democratic leaders of the House of Representatives. The proposed bill is expected to include another $1,200 in direct payments to eligible individuals, as well as an extension to unemployment benefits, liability protection for businesses and tax incentives to encourage Americans to get back to work.
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