Around 1.106 million people filed for initial jobless claims last week, pushing the number into seven figures again, after two weeks of declines, according to data from the Department of Labor.
The elevated figure calls into question the nature — and length — of the nation’s economic recovery. Economists had expected initial weekly claims to have fallen from 963,000 to 920,000. Prior to the coronavirus pandemic, the average number of claims hovered at around 200,000 a week.
Lawmakers continue to debate a coronavirus relief package that would offer additional assistance to Americans who lost their job when the economy shut down to halt the spread of the virus. Pandemic Unemployment Assistance, which provided $600 a week in additional benefits, expired at the end of July.
Republicans are pushing for a smaller plan, citing improved economic metrics such as last week’s surprise fall in jobless claims and the lower unemployment rate — which, at 10.2 percent, is still three times what it was in February, before the pandemic took hold, but lower than the peak of 14.7 percent.
“There’s no question that the economic numbers are doing better. So, as we reopen the economy, we see things are getting better,” Treasury Secretary Steven Mnuchin told CNBC on Tuesday. “But the president wants us to do more. He wants us to provide money for kids and jobs, and a second round of the PPP and direct payments are a clear part of that.”
For many families, state benefits are simply not enough to make ends meet. In Mississippi and Arizona, the weekly state unemployment benefit is under $240.
President Donald Trump issued an executive order earlier this month that provided $300 a week in additional unemployment benefits, but that assistance is limited to three weeks since it is tied to funding from the Federal Emergency Management Agency.
While the economy is expected to start to grow again in the third quarter, and hiring should pick up, a resurgence in the virus is casting doubt on any “V-shaped” recovery. Some economists are now predicting that it will be more of a “W” shape.
At its last monetary policy meeting, Federal Reserve officials “agreed that the ongoing public health crisis would weigh heavily on economic activity, employment, and inflation in the near term and was posing considerable risks to the economic outlook over the medium term,” according to committee minutes released on Wednesday.
“In the months to come, food insecurity and homelessness are expected to rise to the worst levels since the Great Depression,” Grant Thornton Chief Economist Diane Swonk wrote in a note. “At the current pace, it would take well into 2021 to recoup the 12.9 million jobs lost since February.”