Thursday, 25 June_Claims for benefits from newly laid-off workers remain stubbornly high in the United States, amid fears the resurgent coronavirus could reverse the economy's progress.
Labor Department data released Thursday showed another 1.48 million Americans made new claims for unemployment benefits last week, a drop of only 60,000 from the week prior, indicating that even as states allow businesses to resume after shutting activity down in mid-March, some employers might not be able to make it.
Separate data from the Commerce Department showed manufacturing orders rebounding last month as factories resumed production, but with the coronavirus pandemic making a renewed assault on the world's largest economy, analysts warn the limited progress is imperiled.
"We have made it through the initial employment shock and are now seeing the troubling long tail of second order effects as many businesses gradually realize that conditions won't get back to anything close to normal in the near future," Shai Akabas, director of economic policy at the Bipartisan Policy Center, said on Twitter.
The latest data brought layoffs to 47.2 million since the lockdowns began.
Adding to the toll were the 728,120 people applying for benefits last week under a special program authorized in the $2.2 trillion CARES Act stimulus package for contractors and the self-employed, workers not normally eligible for such benefits.
The insured unemployment rate indicating people actually receiving benefits was at 13.4 percent in the week ended June 13, down only half a point despite hopes people would go quickly back to their jobs as states reopened.
Mixed signals
Jobless claims peaked in late March after skyrocketing due to the business shutdowns, but they've remained well above any weekly level seen during the global financial crisis since then, and the unemployment rate hit 13.3 percent in May.
Rubeela Farooqi of High Frequency Economics noted positively that the four-week moving average on claims has fallen from 1.78 million to 1.62 million.
"Filings remain elevated, perhaps reflecting companies' inability to maintain their workforce under new and more restrictive rules of operation," Farooqi said.
"The decline in continuing claims for a third straight week is encouraging and continues to signal hiring and rehiring."
The Paycheck Protection Program (PPP) created by the CARES Act offered loans that turned into grants if employers rehired all employees laid off as the pandemic hit.
But Oxford Economics warned those conditions could actually feed the unemployment, with companies having taken the money and then laid off their workers again.
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