Unemployment remains high as coronavirus slows recovery

The U.S. Department of Labor released new jobless numbers Thursday, showing 1.3 million Americans filed unemployment claims last week and a national unemployment of 11.9%, signs indicating many companies are still cutting jobs as the viral outbreak intensifies.

The elevated level of applications for jobless aid is occurring as new confirmed cases of coronavirus are spiking across much of the Sun Belt, threatening to weaken the economic recovery. Case counts are rising in 40 states and 22 states have either paused or reversed their efforts to reopen their economies, according to Bank of America.

Rising infections paralleled rising applications for aid in some states getting hit right now and fell in states with declining infections. In Florida, claims doubled to 129,000, and in Georgia they rose nearly one-third to 136,000. In California, they increased 23,000 to nearly 288,000. Applications also rose in Arizona and South Carolina.

The total number of people who are receiving jobless benefits dropped 400,000 to 17.3 million, the government said. That suggests some companies are continuing to rehire workers, which could offset some of the job losses reflected in the still-high level of claims.

“The risk of a dip lower in the economy has increased as more states adopt policies to combat the virus spread,” economists at Bank of America said in a research note. “Until the country manages to get the virus under control, the recovery is likely to be one of fits and starts.”

Thursday morning’s numbers show the 17th consecutive week of claims above the 1 million mark. Before the pandemic intensified in mid-March, the highest weekly figure on record was about 700,000.

Sales at retail stores and restaurants likely rose 5.4% in June, according to data provider FactSet. That would follow a record gain of nearly 18% in May as shops, restaurants and bars reopened after nationwide shutdowns in the previous months, when sales plummeted. Still, sales will likely remain sharply below their levels of a year ago. California, Florida and other states have closed down bars for a second time and barred indoor dining because cases are surging.

The resurgence of the virus and new business shutdowns in states such as Florida and California, along with signs that consumers are pulling back from eating out and other activities, has intensified fears that the economic recovery is losing steam.

The government’s employment report for June showed a solid gain of 4.8 million jobs and an unemployment rate that fell to 11.1% from 13.3%.

The Associated Press contributed to this report.