The number of Americans applying for jobless aid rose for the second week in a row, signaling the economic recovery is losing speed.
Roughly 778,000 people applied for state unemployment benefits last week, up 30,000 from the previous week, the Labor Department said Wednesday. Another 311,000 applied for Pandemic Unemployment Insurance, a federal program for self-employed and gig workers.
“Jobless claims are moving in the wrong direction,” analysts with Oxford Economics said in a report.
Before the pandemic struck the economy, claims averaged 225,000 a week. They shot up to 6.9 million in one week in March and have been falling — slowly — over the past eight months as businesses reopened and some workers found new employment. But uncontrolled spread of the coronavirus across the U.S. is now rolling back that progress.
“We expect claims to keep rising for several more weeks because people are retreating from social interactions, and state and local authorities are adding restrictions to dining and other indoor commercial activity across the country,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a research note.
A total of 20.5 million people were receiving some form of unemployment assistance in the first week of November, the most recent data available.
The spike in virus cases is leading some economists to warn of a possible “double-dip” recession as businesses again shut their doors and as states and cities reimpose restrictions on public gathering.
“With infections continuing to rise at an elevated pace and curbs on business operations widening, layoffs are likely to pick up over coming weeks,″ Rubeela Farooqi, chief U.S. economist at High Frequency Economics, told investors in a report. “Even as job growth is continuing, the labor market remains under stress and far from complete recovery.″
The uptick in claims comes just as the country’s social safety net, expanded this summer, is being pulled back. Unemployment benefits are set to run out for 12 million people the week after Christmas. With federal and local eviction moratoriums ending December 31, millions of people are also at risk of losing their homes.
Congress has been deadlocked for months over another round of funding to support the economy, with Democrats and Republicans far apart on how much they are willing to spend.
Source: cbsnews.com
