New unemployment numbers released Thursday morning by the U.S. Department of Labor show 1.3 million new jobless claims over the last week.
That was a decrease of 99,000 from the previous week, the department said, adding the nation’s unemployment rate is 12.4%.
The layoffs are occurring as a spike in virus cases has forced six states to reverse their move to reopen businesses. Those six — Arizona, California, Colorado, Florida, Michigan and Texas — make up one-third of the U.S. economy.
»COMPLETE COVERAGE: CORONAVIRUS
Fifteen other states have suspended their reopenings. Collectively, the pullback has stalled a tentative recovery in the job market and is likely triggering additional layoffs.
The total number of people who are receiving jobless benefits dropped 700,000 to 18 million. That suggests that some companies are continuing to rehire workers.
Credit: AJC
The largest increases in initial claims for last week were in Michigan, Indiana, Texas, Virginia and Kentucky, while the largest decreases were in Oklahoma, Florida, Maryland, Georgia and California.
An additional 1 million people sought benefits last week under a separate program for self-employed and gig workers that has made them eligible for aid for the first time. These figures aren’t adjusted for seasonal variations, so the government doesn’t include them in the official count.
The intensifying outbreaks and more stringent government restrictions have slowed economic activity in much of the country and may be weighing on hiring. The government’s jobs report for June showed a solid gain of 4.8 million jobs and an unemployment rate that fell to 11.1% from 13.3%.
Yet even so, the economy has regained only about one-third of the jobs that vanished in March and April. And the June jobs report reflected surveys of Americans that were conducted in the middle of that month — before the pandemic flared up again.
More recent data are worrisome. Spending on credit and debit cards issued by Bank of America fell in the week that ended June 27 compared with the previous week. Auto and existing-home sales have slowed.
Restaurant visits have also leveled off nationally, including in states that haven’t begun to close down again, according to data from OpenTable, the reservations website.
“This suggests that renewed fears about the virus, rather than government restrictions, are driving the pullback in activity,” said Andrew Hunter, senior U.S. economist at Capital Economics, a forecasting firm.
Data from Kronos, which produces work-scheduling software for small businesses, reinforces evidence that the recovery of the job market is faltering.
In the week that ended July 4, layoffs among Kronos’ clients actually rose and hirings declined. Companies are now laying off an average of nearly three workers for every new hire, the company’s data shows.
And in the retail industry, the number of shifts worked changed little last week after steady increases in previous weeks. David Gilbertson, a vice president at Kronos, said this suggests that consumer demand in many cases hasn’t picked up enough to justify more employees.
“Everything that’s going to be open is open,” Gilbertson said. “Now, we just need more people to come in and start spending money before things can pick up again.”
Several companies have warned in recent days that more layoffs are coming. Levi’s, the iconic jeans maker, said it will cut 700 corporate jobs. United Airlines has warned 36,000 of its employees — nearly half its workforce — that they could lose their jobs in October.
»RELATED: Famed clothier Brooks Brothers files for bankruptcy
The renewed threat of job losses is arising just as a federal program that provides $600 a week in unemployment benefits, on top of whatever jobless aid each state provides, is to expire at the end of this month. Congressional leaders have said they will take up some form of a new rescue package when lawmakers return later this month from a two-week recess.
Administration officials have expressed support for additional stimulus. But Senate Republicans have opposed extending the $600 a week in unemployment benefits, mainly on the ground that it discourages laid-off people from returning to work. House Democrats have pushed to extend the $600 a week through January.
In June, employers added 4.8 million jobs, and the unemployment rate fell from 13.3% to a still-high 11.1%. But the economy and the job market will likely struggle to sustain their gains amid the surge in reported infections, which threaten to trigger more shutdowns and layoffs.
About the Author
