Unemployment claims remain historically high

More than 1 million Americans applied for unemployment benefits last week, while claims remained virtually flat in Massachusetts.

The U.S. Labor Department reported on Thursday that the number of people seeking jobless aid last week dropped by 98,000 from 1.1 million the week before. Before the coronavirus pandemic, the number of initial claims had never topped 700,000 in a week.

The number of initial claims has exceeded 1 million every week but one since late March, a sign that the coronavirus outbreak continues to threaten jobs, even as the housing market, auto sales and other segments of the economy have begun to rebound from a springtime collapse.

“We’ve hit this place where we’ve plateaued,” said Robert Murphy, a professor or economics at Boston College. “We’re still in a precarious situation.”

In Massachusetts, 17,157 initial unemployment claims were filed during the week ending Aug. 22, down by just 27 from the 17,184 claims filed the week before.

Nationally, more than 14.5 million people are collecting traditional jobless benefits — up from 1.7 million a year ago — a sign that many American families are depending on unemployment checks to keep them afloat.

“The risk of permanent damage to the labor market remains high, which will slow the pace of recovery,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics, wrote in a research report. “The return to prepandemic levels of prosperity is set to be an uncertain and prolonged process.”

Until July 31, the unemployed were receiving an extra $600 a week in federal money in addition to regular state unemployment benefits to help them through the crisis. The loss of that money is putting the squeeze on many families.

After passing a massive financial rescue package in March, congressional Republicans and Democrats have been unable to agree on more aid.

Last week, nearly 608,000 people applied for jobless aid under a new program that extends eligibility for the first time to self-employed and gig workers, up from 525,000 the previous week. That figure isn’t adjusted for seasonal trends, so it’s reported separately.

Altogether, the Labor Department said that 27 million people are receiving some form of unemployment benefits, though the figure may be inflated by double-counting by states.

Herald wire services contributed to this report.

from Boston Herald https://ift.tt/3b5644u