WASHINGTON — About 1.5 million laid-off workers applied for U.S. unemployment benefits last week, evidence that many Americans are still losing their jobs even as the economy appears to be slowly recovering with more businesses partially reopening.
The latest figure from the Labor Department marked the 10th straight weekly decline in applications for jobless aid since they peaked in mid-March when the coronavirus hit hard. Still, the pace of layoffs remains historically high.
The total number of people who are receiving unemployment aid fell slightly, a sign that some people who were laid off when restaurants, retail chains and small businesses suddenly shut down have been recalled to work.
The figures are “consistent with a labor market that has begun what will be a slow and difficult healing process,” said Nancy Vanden Houten, an economist at Oxford Economics. “Still, initial jobless claims remain at levels that at the start of the year might have seemed unthinkable.”
Last week’s jobs report showed that employers added 2.5 million jobs in May, an unexpected increase that suggested that the job market has bottomed out.
But the recovery has begun slowly. Though the unemployment rate unexpectedly declined from 14.7%, it is still a high 13.3%. And even with the May hiring gain, just one in nine jobs that were lost in March and April has returned. Nearly 21 million people are officially classified as unemployed.
Even those figures don't capture the full scope of the damage to the job market. Including people the government said had been erroneously categorized as employed in the May jobs report and those who lost jobs but didn't look for new ones, 32.5 million people are out of work, economists estimate. That would have raised May's unemployment rate to 19.7%.
Thursday’s report also shows that an additional 706,000 people applied for jobless benefits last week under a new program for self-employed and gig workers that made them eligible for aid for the first time. These figures aren’t adjusted for seasonal variations, so the government doesn’t include them in the official count.
The weekly reports on applications for unemployment benefits track layoffs. But they don't directly account for hiring, which can offset layoffs. The surprise job gain in May suggests that some employers are recalling laid-off workers.
Private real-time data also points to steady, if modest, rehiring. Data from Kronos, whose software tracks workers' hours, shows that the number of shifts worked has recovered steadily since bottoming in mid-April. Shifts worked have risen 25% since then, recovering nearly half the work that was lost to the pandemic-induced business shutdowns.
“The growth in shifts worked ... indicates that furloughed employees are being called back to work as each state opens up,” said Dave Gilbertson, a Kronos executive.
Twenty-four states reported a rise in applications for jobless aid last week, up from just four the week before, though the state data isn't adjusted for seasonal trends so it can be volatile. California, New York and Massachusetts reported sharp increases. Florida, Georgia and Texas, some of the earliest states to reopen their economies, reported large declines.
In February, the economy fell into a deep recession, according to the National Bureau of Economic Research, the association of economists that is the official arbiter of recessions. The Federal Reserve estimated Wednesday that the economy will shrink 6.5% this year. That would be, by far, the deepest annual contraction on records dating to World War II.
Even as restaurants, bars and gyms reopen, they are doing so at lower capacity. And consumer spending on such services remains far below what it was before the viral outbreak.
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