Author: Christopher Rugarber
Washington (Associated Press)-Last week, the number of Americans seeking unemployment benefits fell to 310,000, the low point of the pandemic, indicating that the surge in COVID-19 cases caused by the delta variant has not yet led to widespread layoffs.
The Labor Department report on Thursday showed that the number of initial jobless claims fell from 345,000 after the previous week’s amendment. At the current rate, the number of weekly applications for benefits is approaching the approximately 225,000 before the pandemic.
But the spread of delta variables this summer has brought new pressures to the economy and job market. On Wednesday, the Federal Reserve reported that US economic activity “slowed down” in July and August, partly because of concerns about delta variables that led to reduced dining, travel and tourism activities.
Despite this, the continued decline in the number of people applying for unemployment benefits — six times in the past seven weeks — shows that despite the economic slowdown, most companies are still retaining employees. This trend should help sustain the economic rebound in the current wave of infections.
However, the pace of hiring has slowed-at least for now. Last week, the government reported that hiring slowed sharply in August, with employers adding only 235,000 jobs after adding about 1 million jobs in June and July. In industries that require face-to-face contact with the public, especially restaurants, hotels, and retail, the number of recruits has dropped sharply. Despite this, some jobs were added in other areas, and the unemployment rate actually dropped from 5.4% to 5.2%.
“Although the August employment report shows that employers may have pressed the button to suspend hiring due to the recurrence of pandemic fears, the claims data shows that they are reluctant to lay off amidst a record number of job openings,” Economist Nancy Vanden Houten (Nancy Vanden Houten) said. Oxford Economic Consulting Company.
The steady decline in weekly unemployment benefit claims coincided with a reduction in aid to unemployed Americans. This week, more than 8 million people lost all their unemployment benefits as two federal programs covering odd jobs and those unemployed for more than six months expired. These emergency plans were formulated in March 2020, when the pandemic first swept the economy.
This deadline has not yet been reflected in the weekly unemployment application report. The data on the emergency plan in the report was delayed by two weeks. As of August 21, 8.8 million people have benefited from these two programs.
Another 2.6 million people are receiving regular state unemployment assistance. These recipients just lost $300 of a week’s federal unemployment supplement, and it also expired this week.
Eliza Forsythe, an economist at the University of Illinois at Urbana-Champaign, said these deadlines may also be a reason for the decrease in unemployment assistance applications: many unemployed people may now think they are not eligible for assistance. .
Some business owners complained that federal subsidies made it more difficult to fill vacant positions. These requests caused the governors of approximately 25 states to cancel the $300 payment early and shut down two emergency programs in most of them. But academic research has found that, so far, the early termination of unemployment benefits has only resulted in a slight increase in the number of recruits in these states.
Many economists expressed concern that the suspension of work will lead to economic hardship, because the resurgence of the pandemic will make it more difficult for some unemployed to find work. After the previous recession, the emergency expansion of unemployment benefits ended when the number of people still receiving benefits was much smaller.