Initial Unemployment Claims Dip For 15th Straight Week As Coronavirus Surges Across US

Initial unemployment claims totaled 1.3 million last week, slightly lower than the previous week's revised level of 1.31 million, the Labor Department reported Thursday. The Bureau of Labor Statistics estimated the unemployment rate for the week ended July 4 at 11.9%, down 0.2 points from the previous week's estimate.

It was the 15th straight week initial claims were down from the previous week, but the decrease was much smaller as more than 40 states reported increases in coronavirus cases.

“Today’s Labor Department report on unemployment claims shows the lack of meaningful progress in the virus-depressed job market, and the increasing danger of allowing the $600 weekly CARES Act supplement to expire," unemployment expert Alex Stettner of the Century Foundation said in an email to International Business Times. "Today’s numbers confirm that we are fast hurtling toward an economic and humanitarian cliff, with more than 25 million Americans who could soon lose the $600 additional payment.

“Nothing in the rate of decline in ongoing claims should give policymakers the impression that the $600 supplement is no longer needed."

Unadjusted data indicated 1.5 million claims were added under state programs, up 108,000 from the previous week, with nearly 17.4 million people collecting unemployment insurance benefits for the week ending July 11.

"Seasonally adjusted new jobless claims, the closest thing we have to a government real-time report on the job market declined, but just barely. They were down 10,000 from the previous week’s revised level to 1.3 million. And if one doesn’t make the seasonal adjustment to the new unemployment claims, they actually rose, meaning that we lost ground," Bankrate.com senior economic analyst Mark Hamrick told IBT.

Some 32 million people were collecting benefits from all programs for the week ending June 27. Extended benefits, which expire at the end of July, were available in 51 states, with nearly 14.3 people claiming pandemic unemployment assistance benefits in 48 states and 936,431 claiming pandemic emergency unemployment compensation benefits in 44 states.

The total compares to 1.6 million for the comparable week in 2019.

Among those joining unemployment rolls for the week ending July 4 were 1,323 federal civilian employees and 1,077 newly discharged veterans. Some 14,146 former federal civilian employees claimed benefits for the week ending June 27 along with 12,792 newly discharged veterans.

The highest level of unemployment was reported in Puerto Rico, followed by Nevada, Hawaii, New York and Louisiana. Initial claims rose the most in Texas, New Jersey, Maryland, Louisiana and New York while the largest decreases were reported in Indiana, Florida, California, Georgia and Oklahoma.

Stettner warned layoffs will not end until the coronavirus pandemic is under control.

"The looming end of the $600 per week [pandemic benefits] means these families will see their weekly benefits cut by 50-85 percent and the economy will lose more than $15 billion per week in consumer spending," Stettner said. "Sadly, Sen. [Mitch] McConnell has indicated it will take up to three weeks to reach a deal on a new COVID-19 relief package, leaving tens of millions of Americans in needless limbo as Congressional leaders and the White House dawdle in coming up with concrete proposals.”

McConnell and fellow Republicans have indicated they are cool tothe idea of extending the pandemic benefits, saying they fear it would encourge people to stay on the unemployment rolls. No action is expected until August.

"The frustrating reality is that new claims have remained above 1 million since exploding in late March and having dipped below 2 million in late May. Improvement has proved harder to come by in recent weeks," Hamrick added.

"After an encouraging initial start to the recovery, the dramatic reemergence of COVID-19 risks putting the economy back on its heels. With the paramount aim of saving lives, renewed restrictions placed on businesses also take a renewed toll taken on the economy. Ultimately, the only treatment for what ails the economy is also what’s needed to overcome the virus. That’s why the ongoing promising quest for safe and effective vaccines is so critically important."