Number of laid-off workers seeking jobless aid stuck at 1.3M

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Job seekers exercise social distancing as they wait to be called into the Heartland Workforce Solutions office in Omaha, Neb., Wednesday, July 15, 2020. (AP Photo/Nati Harnik)

WASHINGTON (AP) — The number of laid-off workers seeking unemployment benefits remained stuck at 1.3 million last week, an historically high level that indicates 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 Sunbelt, 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.

The Labor Department’s Thursday report showed that applications for jobless aid fell by about 10,000 from the previous week. The figure has now topped 1 million for 17 straight weeks. Before the pandemic, the record high for weekly unemployment applications was nearly 700,000.

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

An additional 928,000 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 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%.

But economists increasingly doubt that such a pace can be sustained. The number of employees working at small businesses declined last week, particularly in states with worsening viral outbreaks, according to data from Homebase, a company that makes scheduling and work-tracking software.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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