1.4 million seek jobless aid as virus surges in South, West

WASHINGTON — More than 1.4 million laid-off Americans applied for unemployment benefits last week, further evidence of the devastation the coronavirus outbreak has unleashed on the U.S. economy.

The continuing wave of job cuts is occurring against the backdrop of a spike in virus cases that has led many states to halt plans to reopen businesses and has caused millions of consumers to delay any return to travelling, shopping and other normal economic activity. Those trends have forced many businesses to cut jobs or at least delay hiring.

The Labor Department’s report Thursday marked the 19th straight week that more than 1 million people have applied for unemployment benefits. Before the coronavirus hit hard in March, the number of Americans seeking unemployment checks had never exceeded 700,000 in any one week, even during the Great Recession.

The number of new applicants was up by 12,000 from the week before, the second straight increase. New claims had dropped for 15 straight weeks, from mid-April through early July, as states began to reopen their economies, a move that is now stalling.

All told, 17 million people are collecting traditional jobless benefits, a sign that unemployment checks are keeping many American families afloat financially at a time of big job losses and agonizing economic uncertainty.

The pain could soon intensify: An supplemental $600 in weekly federal unemployment benefits is expiring, and Congress is squabbling about extending the aid, which would probably be done at a reduced level.

A resurgence of cases in the South and the West has forced many many bars, restaurants, beauty salons and other businesses to close again or reduce occupancy. Between June 21 and July 19, for example, the percentage of Texas bars that were closed shot up from 25% to 73%; likewise, 75% of California beauty shops were shuttered July 19, up from 40% just a week earlier; according to the data firm Womply.

And many states have imposed restrictions on visitors from states that have reported high level of virus cases, thereby hurting hotels, airlines and other industries that depend on travel.

Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said the jobs numbers were disheartening.

“A resurgence in virus cases has resulted in a pause or rollback of reopenings across states and the pace of layoffs is likely to pick up just as expanded unemployment benefits are expiring,” Farooqi said. “The risk of temporary job losses becoming permanent is high from repeated closures of businesses. That could result in an even slower pace of recovery.”

The virus and the lockdowns meant to contain it have hammered the American economy: Employers slashed a record 20.8 million jobs in April, restoring about 7.5 million of them in May and June as many states began to reopen their economies.

Last week, an additional 830,000 million people applied for jobless aid under a new program that extends eligibility for the first time to self-employed and gig workers. That figure isn’t adjusted for seasonal trends, so it’s reported separately.

Altogether, the Labor Department said that 30.2 million people are receiving some form of unemployment benefits, though the figure may be inflated by double-counting by states.

Since she was laid off by a tech industry non-profit May 15, Miranda Meyerson, 38, has been trying to find another job and to sign up for unemployment benefits. ”It’s just incredibly frustrating and demoralizing,’’ she said. Potential employers seem to be delaying hiring decisions. “Nobody gets back to you,’’ she said. “You feel like there’s only so long you can submit (applications) into a void.’’

Meyerson and her partner moved from New York to Oakland, California, in March, just as the virus began to spread rapidly across the United States. The move to a new state has complicated her so far futile efforts to collect benefits from a swamped California unemployment benefits system. ”They’re obviously totally overwhelmed,” she said. “You can’t even get on the phone to talk to anybody.’’

Allegra Troiano, 64, was stunned when the Milwaukee English language learning centre she ran was closed in May. “They got through SARS. They got through the Ebola scare,’’ she said. “Nobody ever thought it would get to the point where we were shutting down.’’

The extra $600 in unemployment pay has been a lifeline as she contends with a $2,200 mortgage and $600 in monthly health insurance expenses. “It means surviving,” she said.

Laid off from his job as a bank security guard in March, James Adams, 53, of New Kensington, Pennsylvania, said that “losing that $600 a week would be devastating. I have been having a hard time sleeping.’’

A Trump voter, Adams has a message for Republican senators reluctant to spend more money on unemployment aid: “I know they want to be fiscal hawks, but swallow the bitter pill and help out the people who need this help.”

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AP Economics Writer Christopher Rugaber in Washington and Thalia Beaty in New York contributed to this report.

Paul Wiseman, The Associated Press