Over a million more Americans applied for unemployment benefits in the week ending June 20, as weak demand pushes businesses to lay off workers, suggesting a prolonged path to labor market recovery in the wake of the CCP virus pandemic.
The Labor Department’s weekly jobless claims report (pdf) released June 25, shows that 1.48 million American workers filed initial jobless claims for the week ending June 20. That’s down by 60,000 from an upwardly revised 1.54 million in the prior week.
A relative bright spot in the Labor Department’s jobless figures is the number of continuing claims, which represent people who earlier filed initial claims and remain unemployed. These dropped by 767,000 for the week ending June 13, down to nearly 19.5 million. While an encouraging trend, the number is still over three times higher than the record of over 6.6 million set in May 2009.
The figures suggest that while many businesses have reopened after closing mid-March to curb the spread of the deadly bug, a surge in infections in parts of the country along with persistently weak demand continue to pressure employers to lay off workers.
“There were some businesses that tried to maintain their workforce, waiting to see what would happen as businesses reopened,” said Gus Faucher, chief economist at PNC Financial. “Even as the economy is picking up they are not seeing a lot of demand and are deciding that they don’t need that many workers.”
The seasonally-adjusted insured unemployment rate dropped by half a percentage point to 13.4 percent for the week ending June 13, supporting the view that more businesses are re-hiring furloughed workers.
Still, rising COVID-19 case counts in parts of the country are likely to hurt employment as some people stay away from restaurants and other consumer-facing establishments, even if businesses are not shut down again.
“Something like close to 25 million people have been displaced in the workforce, either partially or through unemployment, and so we have a long road ahead of us to get those people back to work,” Federal Reserve Chairman Jerome Powell told the Senate Banking Committee in Congressional testimony last week.
Labor Department figures showed that the largest increases in initial weekly jobless claims for the week ending June 13 were in Oklahoma (+7,254), Texas (+5,047), New Jersey (+3,272), New York (+1,351), and Louisiana (+1,243).
The highest insured unemployment rates for the week ending June 6 were in hospitality industry-reliant Nevada (22.6 percent), followed by Puerto Rico (20.6 percent), Hawaii (18.3), New York (17.8), California (17.3), Michigan (16.9), Louisiana (16.2), Massachusetts (16.2), the Virgin Islands (16.2), and Connecticut (15.8).
From The Epoch Times
