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WASHINGTON (AP) – The number of people seeking unemployment assistance climbed to 965,000 last week, the highest number since late August and a sign that the resurgence of the virus has likely increased layoffs.
The latest unemployment registration figures, released Thursday by the Ministry of Labor, remain at unprecedented levels until the virus hits. Before the pandemic, weekly claims were typically around 225,000. They soared to nearly 7 million last spring, after nationwide closures took effect. Requests declined over the summer, but have remained above 700,000 since September.
The high pace of layoffs coincides with an economy that has weakened as consumers have avoided traveling, shopping and eating in the face of soaring viral cases. More than 4,300 deaths were reported on Tuesday, another record. Closures of restaurants, bars and other places where people congregate in California, New York and other states have likely resulted in layoffs.
Some states and cities resist closures, partly for fear of economic consequences but increasing the risk of new infections. Minnesota authorized resumption of in-person meals this week. Michigan is on the verge of doing the same. Some Kansas City bars and restaurants are extending their hours.
Economists say that once coronavirus vaccines are more widely distributed, a broader recovery is expected to take hold in the second half of the year. The new Biden administration, along with a now fully Democratic-led House and Senate, are also expected to push for more bailout aid and spending measures that could accelerate growth.
Yet many analysts are also concerned that with millions of Americans still unemployed and up to one in six small businesses going bankrupt, those hardest hit by the recession are unlikely to benefit from a recovery. anytime soon.
“While the economic outlook for the end of 2021 is optimistic, the recovery in the labor market has taken a step backwards,” said Nancy Vanden Houten, economist at Oxford Economics, “and we expect claims will remain high, with the risk that they increase. levels from last week.
Applications for aid last week may have been high in part because state employment offices were closed during the holidays, forcing some unemployed people to wait until last week to apply. The addition of a federal unemployment benefit of $ 300 per week, as part of a rescue aid package adopted late last month, may also have encouraged more people to apply, said Vanden Houten .
Many people in the arts and entertainment fields have lost most or all of their income as the coronavirus has shut down performance venues. They include Shelby Lewis, a classical trumpeter from Baton Rouge, Louisiana, who hasn’t performed since early March, when he played Bach with a Kansas City chamber musical.
Lewis, 48, receives $ 400 weekly unemployment assistance, including the new federal benefit of $ 300, and his wife is still working. He appreciates federal support, which independent musicians like him have not had in the past.
Fearing, however, that many classical music groups would be shut down for good, Lewis reoriented his career towards photography and design, which he did for a decade before becoming a full-time musician.
“I think there will generally be a decline for smaller regional orchestras,” he says.
In addition to the first claims for unemployment aid last week, the government said Thursday that 5.3 million Americans continued to receive state unemployment benefits, up from 5.1 million the week before. This suggests that fewer unemployed people find jobs.
About 11.6 million people received unemployment assistance from two federal programs in the week ending December 26, the latest period for which data is available. One of these programs offers extended benefits to people who have exhausted their state aid. The other provides benefits to self-employed and contract workers.
These two programs had expired towards the end of December. They were renewed late, until mid-March, as part of the $ 900 billion bailout program that Congress has approved and that President Donald Trump has enacted. This law also provided for relief checks of $ 600 for most adults and an additional unemployment benefit of $ 300 per week. Democrats in Congress are in favor of increasing checks to $ 2,000 and extending federal aid beyond March, as does President-elect Joe Biden.
The weakness in the US labor market was clearly highlighted in the December jobs report released by the government last week. Employers cut jobs for the first time since April as the pandemic tightened its grip on consumers and businesses.
The figures also illustrate a very unequal labor market: Last month’s losses were concentrated in restaurants, bars, hotels and entertainment venues – places that provide in-person services that some governments have restricted or consumers are avoiding. Educational services, primarily colleges and universities, also reduced the number of workers in December. As are film and music studios.
Most of the other major industries, however, reported job gains. Many economists expected last spring that the job losses would spill over to more industries. Although all sectors of the economy initially laid off workers, most of them avoided deep job cuts. Manufacturing, construction, and professional services like engineering and architecture, for example, all created jobs in December.
At the same time, many companies seem reluctant to significantly increase recruitments. A government report on Tuesday showed employers were posting fewer vacancies in November than in October. The decline, although small, was widespread in most industries. Even now, the country has nearly 10 million fewer jobs than before the pandemic caused a deep recession almost a year ago, after recovering just 56% of the jobs lost in the spring.
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AP Business editor Alexandra Olson contributed to this report from New York.
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