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New unemployment claims increased during the week of July 18, rising to 1.41 million over the previous week’s total of 1.3 million (seasonally adjusted).
Last week was the first week of increasing job losses after sixteen weeks of gradual declines since March. Job losses peaked during the week of March 28 when a stunning 6.8 million workers filed for unemployment benefits.
Since then, weekly totals of newly unemployed had gradually declined until last week’s increase.
In total, since mid-March, more than 52 million workers—41 percent of the working age population between 25 and 56 years of age—filed for unemployment benefits.
As of the week of July 11, “continued claims” for unemployment were sought by 16.1 million workers nationwide. Continuing claims had peaked at 24.9 million unemployed during the week of July 4. A decline in continuing unemployment from 24 million to 16 million shows some progress, but a “normal” total for continuing claims in recent years is less than 3 million. Arguably, “excess unemployment” at the moment totals at least 13 million.
The rising unemployment comes partly as a result of state governments forcing the closures of some businesses, or restricting operations, in the name of mandatory social distancing.
Not only has this reduced possible working hours for employees, but it has likely reduced business owners’ efforts to expand their businesses due to the extreme uncertainty that accompanies “emergency orders” now issued by governments. These orders are not subject to debate or any meaningful legislative process, making them far more unpredictable than ordinary legislation.
Revenue has declined precipitously for many businesses in recent months.
The approximately 16 million workers who continue to collect unemployment benefits will face a big problem next week as the additional $600 unemployment benefit will run out. CNBC explains:
Tens of millions of Americans who lost their jobs because of the coronavirus pandemic have been able to collect an extra $600 in weekly federal unemployment benefits over the past few months on top of the standard amount given by their state. For many households, the enhanced benefits have been a financial lifeline amidst record job loss and a burgeoning recession.
But on July 31, that enhanced benefit will end — and that could have dire consequences for millions of households.
Political pressure is mounting to continue the benefit, and to pass another stimulus and relief package overall. Given that tax revenues have collapsed, this will require essentially “printing” the money necessary for an expansion of the “CARES” Act. The US is now on track to produce more than $3 trillion in deficit spending for the 2020 fiscal year, which ends on September 30.
