More than 790,000 Americans filed for unemployment insurance for the first time last week, the Labor Department said Thursday, as the economic fallout from the coronavirus pandemic continues to mount.
The rough measure of layoffs was down 75,974 from the previous week. The figures are not seasonally adjusted.
The latest weekly tally has dipped significantly from the 6.2 million who filed first-time claims in early Spring, when the economy ground to a virtual halt to slow the spread of the coronavirus.
But the weekly volume of initial claims still hovered near what was previously the all time high–roughly 1 million on a non-seasonally adjusted basis — during a recession in 1982. And in a little more than six months, over 56 million workers have filed for benefits.
“Sifting through the messy jobless claims data, we find that layoffs remain widespread and an historically high number of individuals are still receiving some type of jobless benefits,” Oxford Economics said in a note. “Failure on the part of policymakers to enact another fiscal relief package poses significant downside risks to the economy and labor market as the recovery appears to be losing momentum.”
USA TODAY is now using non-seasonally adjusted jobless claims numbers because the Labor Department has switched to a different method to adjust the data based on seasonal factors, such as school workers losing jobs in June. The old method resulted in seasonal adjustments that dramatically inflated the number of claims filed during the pandemic.
Continuing claims, which represent all Americans still getting unemployment payments with a one-week lag, totaled 12,321,395, down 7.7% from a week earlier.
Economists have been focusing more on that number because it reflects all who remain unemployed, while its weekly shifts offer a clearer picture of how many people have gone back to work.
“We think that the recent declines in continuing claims likely reflect improvement in the labor market,” Daniel Silver, of JP Morgan Research, wrote in a note, “but also could have resulted from people exhausting eligibility for regular state programs.”
A chilly holiday season on the horizon
The historic number of Americans needing unemployment aid is a troubling sign as the nation approaches its first holiday season since the start of the pandemic, a global health crisis that largely froze the economy and continues to hinder a rebound.
Though most states have attempted to reopen, many businesses have had to shut once again amid flare ups of the virus. The consultancy firm Deloitte is predicting retail sales will rise a slight 1% to 1.5% this holiday season, a potential blow to retailers who count on that critical period for 20% to 30% of their annual revenue.
The holiday forecast is also a snapshot of overall consumer spending, which represents more than two-thirds of the U.S.’s economic activity but is slowing down as wary consumers watch their household budgets.
Overall sales inched up just 0.6% in August after a burst of spending that greeted the reopening of stores, restaurants and salons in June and July.
“Looking ahead, the direction of the numbers does not bode well for the holiday season,” Neil Saunders, managing director of the retail consultancy Global Data said in a note. “Low-income households have been pivotal in driving the early phases of the recovery, and job growth is losing momentum, so further fiscal assistance to struggling households will be essential to prevent a relapse in spending.”
Financial relief for those who are out of work remains uncertain. An extra $600 weekly benefit that supplemented state jobless aid dried up in July. Some states, including Missouri, Arizona and Montana have already run out of funds to pay an extra $300 a week authorized by President Donald Trump in August.
And Congress appears deadlocked on coming up with a new relief package, leaving millions of Americans in limbo.
“With the boost from re-openings largely past, and fiscal support ebbing, households face a risk-filled fall with less support for their pocketbooks,” Oxford Economics said in a note.
The additional $300 benefit, retroactive to Aug. 1, is haltingly making its way to out-of-work Americans. As of last Wednesday, only seven states – Arizona, Louisiana, Massachusetts, Missouri, Montana, Tennessee and Texas – had distributed the monies, according to The Century Foundation, a nonprofit think tank.
Many states are struggling to revamp their systems to distribute the aid. And Florida said this week it would have to end the assistance early due to complicated federal matching requirements, according to The Century Foundation.
“Clearly the … program is not up to the task or the size of our jobs crisis,” Andrew Stettner, senior fellow at The Century Foundation, said in a statement. Congress needs to restore its relief package, he says, “and extend these aid programs through the winter of 2021.”
Follow Charisse Jones on Twitter @charissejones