New claims for state unemployment insurance fell last week, but layoffs continue to come at an extraordinarily high level by historical standards.
Initial claims for state benefits totaled 790,000 before adjusting for seasonal factors, the Labor Department reported Thursday. The weekly tally, down from 866,000 the previous week, is roughly four times what it was before the coronavirus pandemic shut down many businesses in March.
On a seasonally adjusted basis, the total was 860,000, down from 893,000 the previous week.
“It’s not a pretty picture,” said Beth Ann Bovino, chief U.S. economist at S&P Global. “We’ve got a long way to go, and there’s still a risk of a double-dip recession.”
The situation has been compounded by the failure of Congress to agree on new federal aid to the jobless.
A $600 weekly supplement established in March that had kept many families afloat expired at the end of July. The makeshift replacement mandated by President Trump last month has encountered processing delays in some states and has funds for only a few weeks.
“The labor market is stalling,” said Scott Anderson, chief economist at Bank of the West in San Francisco. “We’re facing more headwinds, especially with the stimulus package delayed in Congress.”
New claims for Pandemic Unemployment Assistance, an emergency federal program for freelance workers, independent contractors and others not eligible for regular unemployment benefits, totaled 659,000, the Labor Department reported.
Federal data suggests that the program now has more beneficiaries than regular unemployment insurance. But there is evidence that both overcounting and fraud may have contributed to a jump in claims.
Marcos Quintana, 29, was laid off in December from his job as a seasonal custodian at a school in Bakersfield, Calif. He expected to find new work quickly, but the pandemic hit, and many custodial jobs dried up.
He started receiving $200 a week in state unemployment benefits, as well as a $600 boost from the federal government. When the $600 program expired in late July and his state unemployment benefits ran out, he was left with $230 a week from Pandemic Emergency Unemployment Compensation, a federal program for those whose state benefits have expired.
Mr. Quintana lived with his girlfriend, who lost her job as a hairstylist in March when salons closed. She filed for unemployment benefits but never received them, so Mr. Quintana supported them, paying the $935 in rent and as much as $300 in utilities for their apartment. To avoid falling behind on his $357 car payment and $185 car insurance bill, he cut off cable television and borrowed from his father.
Then Mr. Quintana found that he was eligible for Lost Wages Assistance, a short-term supplement that provides $300 a week from federal disaster funds. He was certified to receive the payments on Sept. 15, but he’s not sure when they will arrive.
Regardless, the money will be too late to avoid upheaval in Mr. Quintana’s life. His relationship with his girlfriend soured as the financial stress mounted. And Mr. Quintana couldn’t afford their bills.
So last week the couple split, and he moved in with his parents.
“It feel like a kid again,” he said. “Like I’ve taken two steps backward in life.”
When the federal government’s $600 weekly supplemental benefit for recipients of unemployment insurance expired at the end of July, ZipRecruiter, an online employment marketplace, expected a huge wave of searches to follow.
But it never materialized. “Job seeker numbers are pretty flat,” said Julia Pollak, labor economist at ZipRecruiter. “People still expect to get their old jobs back.”
Ms. Pollak said she was surprised because 36 percent of those surveyed in July by ZipRecruiter said they would spend more time searching for work if the $600 payments ended. Just over 40 percent said they would be willing to take a less appealing position.
Instead, people aren’t budging. “We see a level of stasis in the economy,” Ms. Pollak said. “The uncertainty causes people to sit and wait. The whole economy is in a bit of a freeze.”
In some cases, workers have dropped out of the labor market. Labor Department data showed that among female workers 25 to 54 years old, 125,000 left the work force in August.
“This is a situation where many people are choosing to delay re-entering the labor force or to withdraw,” Ms….
Read More: Weekly Unemployment Claims: Live Updates