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Unemployment claims jumped last week as coronavirus cases surge

unemployment claims
In this July 20, 2010 file photo, people arrive to seek employment opportunities in Menlo Park, Calif. The Associated Press

Applications for unemployment benefits rose for the second week in a row last week, the latest sign that the nationwide surge in coronavirus cases is threatening to undermine the economic recovery.

More than 827,000 people filed first-time applications for state unemployment benefits last week, the Labor Department said Wednesday. That was up 78,000 from a week earlier, before adjusting for seasonal patterns, and more than 100,000 from the first week of November, when weekly filings hit their lowest level since pandemic-induced layoffs began last spring.

Another 312,000 people filed for benefits under the federal Pandemic Unemployment Assistance program, which covers freelancers, self-employed workers and others who do not qualify for state benefits. And 4.5 million people are now receiving benefits under a separate program that extends payments during the pandemic, a total that has been rising as more people reach the end of their state benefits. Both those programs expire at the end of the year.

Unemployment filings have fallen substantially since last spring, when more than 6 million people a week were applying for benefits. But progress has stalled in recent months, and the data reported Wednesday suggests it could be going in reverse.

Other evidence tells a similar story. Consumer confidence fell in November, The Conference Board reported Tuesday, and private-sector data on job postings, hours worked and consumer spending show either a loss of momentum or outright declines in November.

“We have definitely seen a slowdown since Labor Day, and in the last few weeks, it’s actually gone into a decline,” said Dave Gilbertson, a vice president at UKG, which provides time-tracking software to about 30,000 U.S. businesses.

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Economists worry that the slowdown could deepen in coming weeks, as consumers pull back on spending and cities and states reimpose business restrictions, something that has already begun to happen in California, Michigan and other states.

Unlike in the spring, households and businesses will have to weather the latest shutdowns largely on their own. Federal programs that provided trillions of dollars of support to small businesses and unemployed workers expired over the summer, and efforts to revive them have stalled in Congress. Many of the remaining programs run out at the end of the year.

“Part of the reason the recovery has done so well is because there was so much assistance for affected businesses and workers, and this is just really not the time to snatch defeat from the jaws of victory,” said Julia Pollak, a labor economist at ZipRecruiter. More aid, she said, is necessary to “prevent this temporary disruption from becoming permanent destruction.”

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