Sunday November 29th, 2020 11:09PM

Jobless claims and depressed economy show damage from virus

By The Associated Press
Related Articles
  Contact Editor

WASHINGTON (AP) — The number of laid-off workers seeking U.S. unemployment aid barely fell last week, and the reopening of small businesses has leveled off — evidence that the job market's gains may have stalled just as a surge in coronavirus cases is endangering an economic recovery.

The government also reported Thursday that the economy contracted at a 5% annual rate in the first three months of the year, a further sign of the damage being inflicted by the viral pandemic. The economy is expected to shrink at a roughly 30% rate in the current quarter. That would be the worst quarterly contraction, by far, since record-keeping began in 1948. Economists do expect a snap-back in the second half of the year, though not enough to reverse all the damage.

The number of laid-off workers who applied for unemployment benefits declined slightly to 1.48 million last week. It was the 12th straight drop. Still, an additional 700,000 people applied for benefits 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.

Combining those figures, overall applications for jobless aid have edged down just 3% in the past two weeks — a much slower pace than in late April and May.

“There has been no real decline in weekly claims the past two weeks," said Julia Pollak, a labor economist at ZipRecruiter. “There has also been no real increase in job openings. What seemed like encouraging signs of recovery in May largely stalled in June.”

A separate government report Thursday said orders for durable goods unexpectedly jumped nearly 16% in May, reflecting a rebound in some business activity. Still, the pace of orders and shipments remains far below pre-pandemic levels. And excluding the volatile transportation category, so-called core orders rose only modestly, reflecting still-sluggish business investment.

The virus is intensifying its squeeze on companies across the economy.

Disney is postponing the scheduled mid-July reopening of its Southern California theme parks until it receives guidelines from the state. Macy’s is cutting nearly 4,000 corporate jobs — roughly 3% of its workforce — in response to financial strain caused by the virus.

Apple announced late Wednesday that it would re-close seven of its stores in the Houston area, which is suffering a spike in cases. Last week, it had said would re-close 11 other stores in four states. And the parent company of Chuck E. Cheese restaurants will seek Chapter 11 bankruptcy protection, in part because of the restaurants it has been forced to close as a result of the pandemic.

Larry Kudlow, President Donald Trump's top economic adviser, asserted Thursday on Fox Business that the economy is rebounding quickly.

“I think the strong ‘V’ recovery is right still there,” Kudlow said, referring to the shape of a sharp rebound on a chart.

Most private economists, though, foresee a much more tepid recovery. And the latest economic figures coincide with a sudden resurgence of COVID-19 cases in the United States, especially in the South and West, that is threatening to derail the nascent economic rebound. On Wednesday, the nation set a record high of new coronavirus cases.

Many states are establishing their own records for daily infections, including Arizona, California, Mississippi, Nevada, Texas and Oklahoma. Cases of coronavirus have also jumped in Florida and Georgia. Should those trends continue, states may reimpose some limits on businesses that would likely trigger job cuts. And if not, consumers may choose to shop, eat out, and travel less.

Real time data on small businesses suggests that the job market's improvement slowed in June compared with May, when 2.5 million jobs were unexpectedly added. About 78% of small businesses have reopened as states have lifted shutdown orders, according to data from Homebase, a company that provides scheduling and time-tracking software to small businesses. Yet nationally, that figure has been flat for the past week.

In states that are suffering spikes in COVID-19 cases, small businesses are closing again and cutting some jobs.

Ray Sandza, an executive at Homebase, said the plateau in business reopenings is a worrisome sign that the remaining 20% of small companies could end up closing permanently.

“If you haven't reopened yet, the likelihood of coming back is low,” Sandza said.

He noted that most small businesses had just one or two months' of cash on hand when the pandemic intensified three months ago.

In Florida, Texas, and Arizona, the proportion of small businesses that have closed has risen in the past week as a result of the resurgent viral outbreaks. And in Arizona, as of Monday, the number of employees working at small companies was 31% below the pre-pandemic level. That's worse than the previous week, when it was 26.5%.

Homebase's data showed a solid rebound in jobs and hours worked in May that was consistent with the May jobs report, which also showed that the unemployment rate fell to 13.3% from 14.7%. Those are the two highest unemployment rates since the Great Depression.

Other real-time data is showing similar results. Kronos, which also produces small business scheduling software, said the number of shifts worked is now growing at only half the pace it was in late April and May. And shifts worked have actually fallen in 10 states in the past week, according to Dave Gilbertson, a Kronos official.

Thursday's data on jobless claims included one bright spot: The total number of people receiving unemployment benefits aid fell to 19.5 million from 20.3 million, which suggests that employers are rehiring some workers.

For the unemployed, the federal government has been providing $600 in weekly benefits, on top of whatever state jobless aid recipients are receiving. This federal money has pumped nearly $20 billion a week into the economy and enabled many of the unemployed to stay afloat.

It has been a major help to Alexis O’Neill, who was laid off in March from an accounting job at an aviation fuel company. O’Neill, 49, who lives with her mother in Ann Arbor, Michigan, is looking for a job that would allow her to work from home so she could avoid putting her mother at risk of contracting the virus.

She has applied for at least a dozen jobs but has received no responses except an acknowledgement of her application. Many open jobs now seem to offer lower pay than before the pandemic struck. Compounding the dilemma for O’Neill, Michigan is stuck with the nation’s second-highest state unemployment rate, 21.2%.

“The job market is terrible,” she said. “Everything either pays so badly or doesn’t come with benefits.”

  • Associated Categories: Associated Press (AP), AP National News, AP Online National News, Top General short headlines, AP Business, AP Business - Economy, AP Business - Personal Finance, AP Business - Real Estate
© Copyright 2020 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Tattoo artist sees bump in desire to erase hateful skin art
A Vermont tattoo artist is offering a free service to people who want to remove or cover hateful skin art
10:13AM ( 3 minutes ago )
Bialik and Batman: Actor teams up with DC for science books
“The Big Bang Theory” actor Mayim Bialik is teaming with DC Entertainment on a project that joins superhero power to the power of science
9:58AM ( 17 minutes ago )
Jobless claims and depressed economy show damage from virus
The number of laid-off workers who applied for unemployment benefits fell to 1.48 million last week, the 12th straight drop and a sign that layoffs are slowing but are still at a painfully high level
9:57AM ( 19 minutes ago )
Associated Press (AP)
The Latest: Billionaire says West cornering test kit market
The billionaire tasked with speeding up Africa’s access to critical medical supplies in the COVID-19 pandemic says he turned to China for testing kits after manufacturers in the West said the continent would have to wait months
9:35AM ( 40 minutes ago )
2 Koreas mark war anniversary after pause in rising tensions
North and South Korea are marking the 70th anniversary of the start of the Korean War with largely subdued commemorations amid the coronavirus pandemic
9:25AM ( 51 minutes ago )
'Faces of the conquerors': Trump trip to Rushmore draws fire
President Donald Trump’s plans to kick off Independence Day with a showy display at Mount Rushmore are drawing sharp criticism from Native Americans who view the monument as a desecration of land violently stolen from them
9:11AM ( 1 hour ago )
AP National News
Masks, travel restrictions, testing as virus cases surge
From New York to the suburbs of Melbourne, Australia, governments and businesses are ramping up precautions as coronavirus case numbers surge
8:10AM ( 2 hours ago )
Police overhaul dims, but House Democrats push ahead on vote
With a policing overhaul stalled in the Senate, House Democrats are returning to Washington for a daylong debate and vote on their package of law enforcement changes
7:55AM ( 2 hours ago )
Vote to extend Putin's rule faces little protest in Russia
Russian authorities are pulling out all the stops to get people to vote on constitutional amendments that would enable President Vladimir Putin to stay in office until 2036
7:07AM ( 3 hours ago )
AP Online National News
Orders for US big-ticket factory goods surge 15.8% in May
Orders to American factories for big-ticket goods rebounded last month from a disastrous April and March as the U.S. economy began to slowly reopen
9:34AM ( 41 minutes ago )
Germany slaughterhouse outbreak brings police, mass testing
German police have deployed hundreds of officers across two western regions that have been placed under renewed pandemic lockdown in an attempt to contain a coronavirus outbreak linked to a slaughterhouse
9:33AM ( 43 minutes ago )
US GDP fell at 5.0% rate in Q1; worse is likely on the way
The U.S. economy shrank at a 5.0% rate in the first quarter with a much worse decline expected in the current three-month economic period because of the coronavirus pandemic
9:03AM ( 1 hour ago )
AP Business
The Latest: France to test some 1.3 million near Paris
France is stepping up efforts to root out hidden clusters of coronavirus infections by offering tests to nearly 1.3 million people in the Paris region
5:03AM ( 5 hours ago )
World stocks skid as new coronavirus cases rattle markets
Shares are lower in Europe and Asia as investors focus on surging new coronavirus cases in the U.S. that hit their highest level in two months
4:02AM ( 6 hours ago )
Mongolian People's Party retains strong parliament majority
Preliminary election results show the Mongolian People’s Party retaining a strong parliamentary majority
3:55AM ( 6 hours ago )
AP Business - Economy
US inmates got virus relief checks, and IRS wants them back
Hundreds of thousands of dollars in coronavirus relief payments have been sent to people behind bars across the United States, and the IRS wants the money back
1:01PM ( 21 hours ago )
The Latest: SKorea continues upward trend in new infections
South Korea has reported 51 additional cases of the coronavirus over the past 24 hours, a continuation of an upward trend in new infections
10:23PM ( 1 day ago )
The Latest: Australia records first COVID-19 death in month
Australia has recorded its first death from COVID-19 in a month, increasing the national toll from the new coronavirus to 103
9:44PM ( 1 day ago )
AP Business - Personal Finance
US new home sales rise surprisingly strong 16.6% in May
Sales of new homes rose a surprisingly strong 16.6% in May suggesting that the reopening of major parts of the country were giving a boost to the housing market
10:17AM ( 1 day ago )
Asian shares advance, tracking Wall Street tech rally
Asian shares are mostly higher, tracking a late rally on Wall Street led by technology shares
11:44PM ( 2 days ago )
Stock indexes move higher on Wall Street after a shaky start
Technology companies are helping drive stocks higher on Wall Street after a choppy start Monday as investors weigh the risks that rising coronavirus cases could pose to hopes for an economic recovery
2:04PM ( 2 days ago )
AP Business - Real Estate
Bialik and Batman: Actor teams up with DC for science books
“The Big Bang Theory” actor Mayim Bialik is teaming with DC Entertainment on a project that joins superhero power to the power of science
9:58AM ( 18 minutes ago )
Who hasn't heard of COVID-19 by now? More than you think
A half-year into the pandemic, it’s hard to imagine that anyone, anywhere hasn’t heard of the coronavirus
9:54AM ( 22 minutes ago )
Stocks open lower on Wall Street following more dire data
Stocks are off to a weak start on Wall Street as investors got little encouragement from the latest reports highlighting the damage the coronavirus lockdowns have been inflicting on the economy
9:44AM ( 32 minutes ago )
The Latest: Man City allowed to play Liverpool at home
Manchester City has been given permission to host Liverpool in the Premier League on July 2 at Etihad Stadium
9:40AM ( 36 minutes ago )
LGBTQ Pride at 50: Focus shifts amid pandemic, racial unrest
The coronavirus pandemic and calls for racial equality have changed the very nature of this year's 50th anniversary LGBTQ Pride events
9:37AM ( 38 minutes ago )