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1.2M workers seek jobless benefits, pushing total past 55M



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American Airlines is sending 25,000 Worker Adjustment and Retraining Notification (WARN) letters on July 15 ahead of potential layoffs or furloughs.

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Four months after the COVID-19 pandemic largely shut down the economy and left millions of Americans out of work, employers continue to lay off workers at a historic pace.   

About 1.2 million people filed initial applications for unemployment insurance – a rough measure of layoffs – last week, the Labor Department said Thursday, down substantially from 1.4 million the prior week. Economists surveyed by Bloomberg estimated that 1.41 million workers sought benefits.

The big drop follows two weeks of increases in claims as coronavirus surges in the South and West led more than 20 states to halt or roll back the reopening of restaurants, bars, gyms, movie theaters and other outlets. Previously, claims totals had declined during a 15-week stretch that included the reopening of businesses  in many states.

Still, last week’s total is still historically large. Besides the state backtracks on reopening, many firms have exhausted the forgettable federal loans they received as long as they retained or rehired staffers, prompting struggling firms to let some workers go again.

The tally comes as jobless workers face the recent expiration of a $600 federal supplement to state unemployment benefits and Congress remains at an impasse over whether to extend the bonus and at what level.

Last week’s total will figure into the August employment report.

Economists on average expect the July report, out Friday, to show 1.5 million job gains – including hiring and layoffs – but there’s wide disparity in the forecasts, with some experts predicting job losses and others reckoning that payrolls held steady. The total is likely to mark a slowdown from the 2.7 million payroll increases in May and 4.8 million in June, a surge that recouped about a third of the 22 million jobs the economy shed the prior two months.

Other measures of economic activity also point to a pullback. The number of open small businesses at the end of July was roughly unchanged compared with the beginning of the month, according to Homebase, which makes scheduling software. And fewer employees were working slightly fewer hours.

A tracker of spending by Chase credit and debit card holders showed just a small increase in outlays between June and July, according to JPMorgan Chase.

And a Census Bureau “household pulse” survey indicates there were nearly 7 seven million fewer jobs between the June and July employment report surveys, Capital Economics wrote in a research notes. It adds, however, that the pulse data isn’t seasonally adjusted and may not account for large drops in employment at schools at the start of the summer.

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