WASHINGTON (AP) – The number of Americans seeking unemployment benefits fell to 310,000 last week, a low pandemic and a sign that the rise in COVID-19 cases caused by the delta variant has not yet led to widespread layoffs. .
Thursday report from the Department of Labor showed that unemployment claims fell from a revised total of 345,000 the previous week. And at its current pace, weekly benefit claims are approaching their pre-pandemic figure of approximately 225,000.
But the spread of the delta variant this summer has put new pressure on the economy and the labor market. On Wednesday, the Federal Reserve reported that U.S. economic activity “shrank” in July and August, in part due to a decline in restaurants, travel, and tourism related to delta variant concerns.
However, the continuing fall in unemployment benefits (six declines in the last seven weeks) indicates that most companies remain clinging to their workers despite the slowdown. This trend should help maintain the economic rebound through the current wave of infections.
Still, the pace of hiring has weakened, at least for now. Last week, the government reported that hiring fell sharply in August, with employers adding just 235,000 jobs after having added about a million in both June and July. Recruitment fell on industries that require face-to-face contact with the public, especially restaurants, hotels and shops. However, some jobs were added in other areas and the unemployment rate fell to 5.2% from 5.4%.
“While the August employment report showed that employers may have pressed the pause button in hiring amid renewed concerns about the pandemic, claims data suggest a reluctance to lay off workers amid a record number of job openings, ”said Nancy Vanden Houten, an economist at Oxford Economics.
The steady fall in weekly applications for unemployment benefits coincides with a reduction in unemployment benefits for Americans. This week, more than eight million people they lost all unemployment benefits with the expiration of two federal programs which covered concert workers and people who have been unemployed for more than six months. These emergency programs were created in March 2020, when the pandemic first ravaged the economy.
This cut is not yet reflected in the weekly report on unemployment claims. Data from the emergency program report is delayed by two weeks. On August 21, 8.8 million people received benefits from these two programs.
An additional 2.6 million people received regular state unemployment benefits. These beneficiaries have just lost a federal unemployment supplement of $ 300 a week, which also expired this week.
These limits could also be a reason why unemployment benefits are declining, said Eliza Forsythe, an economist at the University of Illinois at Urbana-Champaign: Many of the unemployed may believe they are now ineligible. to receive help.
Some business owners had complained that the federal supplement made it harder to cover open jobs. These reasons led the governors of about 25 states to cancel the $ 300 payment in advance and to close the two emergency programs in most of those states. But academic research has found it so far, the first reductions in unemployment benefits have only led to a small increase in hiring in these states.
Many economists express concern that the limit would lead to financial difficulties, as the resurgence of the pandemic would make it difficult for some unemployed people to find work. Following previous recessions, emergency extensions of unemployment benefits ended at a time when even fewer people were receiving benefits.