Washington: Over 1.9 million people have applied for US unemployment benefits last week, the ninth straight decline since applications spiked in mid-March. It is however, a sign that the gradual reopening of businesses has slowed the loss of jobs.
The diminishing pace suggests that the job market meltdown that was triggered by the coronavirus may have bottomed out. More and more companies are calling at least some of their former employees back to work.
The total number of people who are now receiving jobless aid rose only slightly to 21.5 million, suggesting that rehiring is offsetting some of the ongoing layoffs.
Though applications for benefits are slowing, the latest weekly number reveals a stark fact. It is still more than double the record high that prevailed before the viral outbreak. It shows that there are limits to how much a partial reopening of the economy can restore a depressed job market mired in a recession.
With all states in the process of gradually reopening for business, more consumers are starting to return to restaurants, stores and hair salons. That trend has boosted consumer spending from exceedingly low levels and has likely encouraged some companies to hire again.
In addition to the laid-off employees who applied for benefits last week, 6,23,000 others sought jobless aid under a new programme for self-employed and gig workers, who now qualify for unemployment benefits for the first time. These figures aren’t adjusted for seasonal variations, so the government doesn’t include them in the overall data.
Since mid-March, 42.7 million people have applied for unemployment benefits. Not all of them are still unemployed, though. Some have since been rehired. And some laid-off people, it turns out, filed duplicate applications for benefits as they struggled with unresponsive state unemployment systems.
Thursday’s report wasn’t affected by the protests over the killing of George Floyd, which in recent days forced some major retailers and small businesses to close. But some economists warn that applications for unemployment aid could rise in next week’s report, reflecting business closures amid the protests and scattered vandalism.
AP