State unemployment claims remained above 1 million last week

Just over 1 million Americans filed new claims for state jobless benefits last week, the latest sign that the economy is losing momentum just as federal aid to the unemployed has been pulled away.

Weekly claims briefly dipped below the 1 million mark earlier this month, offering a glimmer of hope in an otherwise gloomy job market. But filings jumped back above one million the following week, and stayed there last week, the Labor Department said Thursday.

Another 608,000 people filed for benefits under the federal Pandemic Unemployment Assistance program, which offers aid to independent contractors, self-employed workers and others not covered by regular state programmes. That number, unlike the figures for state claims, is not seasonally adjusted.

Other recent indicators also suggest that the recovery is faltering. Job growth slowed in July, and real-time data from private-sector sources suggests that hiring has slumped further in August. On Tuesday, American Airlines said it would furlough 19,000 workers on Oct 1, the latest in a string of such announcements from major corporations.

“It is worrying because it does signal that these large companies are pessimistic about the state of the recovery and don’t think that we are going to be returning to normal anytime soon,” said Daniel Zhao, senior economist at the career site Glassdoor.

Unemployment filings have fallen sharply since early April, when 6.6 million applied for benefits in a single week. But even after that decline, weekly filings far exceed any previous period. Roughly 30 million Americans are receiving benefits under various state and federal programs.

The continued high rate of job losses comes as government support for the unemployed is waning. The $600-a-week federal supplement to state unemployment benefits expired at the end of July, and efforts to replace it have stalled in Congress. President Donald Trump announced this month that he was using his executive authority to give jobless workers an additional $300 or $400 a week, but few states have begun paying out the new benefit, and the $44 billion allocated to the program is expected to last only a few weeks.

Economists warn that the loss of federal support could act as a brake on the recovery. Nancy Vanden Houten, lead economist for the forecasting firm Oxford Economics, estimated that the lapse in extra unemployment benefits would reduce household income by $45 billion in August. That could lead to a drop in consumer spending and further layoffs, she said.

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