More than 1.3 million Americans applied for unemployment benefits last week, a historically high pace that shows that many employers are still laying people off in the face of a resurgent coronavirus.
Indiana, meanwhile, saw initial unemployment claims plummet from numbers that were suspected of being inflated by fraud the previous week, according to figures released Thursday morning by the U.S. Department of Labor.
In Indiana, 24,086 people filed initial unemployment claims in the week ended July 4. That’s down dramatically from an adjusted number of 44,826 the previous week. Prior to the pandemic, the state was typically seeing fewer than 3,000 claims per week.
After peaking at more than 146,000 initial claims in late March, weekly claims had been declining in Indiana during the pandemic until showing increases the previous four weeks. Big spikes in claims in the prior two weeks were attributed partly to organized fraud that had previously struck several other states.
A total of 189,085 people were receiving unemployment benefits in Indiana as of June 27, the Labor Department said Thursday. That was down from 191,288 the previous week.
Thursday’s report also showed that an additional 1.04 million people applied for jobless benefits nationally last week under the new Pandemic Unemployment Assistance program for self-employed and gig workers.
Indiana reported no new recipients for the PUA program in the week ended July 4, down from 15,257 new claims the previous week. The state reported 279,532 people were receiving continued PUA aid as of June 20, down from 261,370 the prior week.
Indiana Department of Workforce officials said last week that scammers have been targeting the PUA program particularly hard. The DWD said it was putting “holds” on, and investigating, many PUA claims before clearing them for payment.
PUA provides up to 39 weeks of unemployment benefits to individuals not eligible for regular unemployment compensation or extended benefits. Those include the self-employed, independent contractors, gig economy workers and workers for certain religious entities.
Nationally, the persistently elevated level of layoffs are occurring as a spike in virus cases has forced six states to reverse their move to reopen businesses. Those six — Arizona, California, Colorado, Florida, Michigan and Texas—make up one-third of the U.S. economy. Fifteen other states have suspended their reopenings. Collectively, the pullback has stalled a tentative recovery in the job market and is likely triggering additional layoffs.
Thursday’s report from the Labor Department showed that the number of applications for unemployment aid fell from 1.4 million in the previous week. The figure has now topped 1 million for 16 straight weeks. Before the pandemic, the record high for weekly unemployment applications was fewer than 700,000.
The total number of people who are receiving jobless benefits dropped 700,000, to 18 million. That suggests that some companies are continuing to rehire workers.
Americans are seeking unemployment aid against the backdrop of a disturbing surge in confirmed viral cases, with increases reported in 38 states. Case counts have especially accelerated in four states that now account for more than half of reported new U.S. cases: Arizona, California, Florida and Texas.
The intensifying outbreaks and more stringent government restrictions have slowed economic activity in much of the country and may be weighing on hiring. The government’s jobs report for June showed a solid gain of 4.8 million jobs and an unemployment rate that fell to 11.1% from 13.3%.
Yet even so, the economy has regained only about one-third of the jobs that vanished in March and April. And the June jobs report reflected surveys of Americans that were conducted in the middle of that month—before the pandemic flared up again.
More recent data are worrisome. Spending on credit and debit cards issued by Bank of America fell in the week that ended June 27 compared with the previous week. Auto and existing-home sales have slowed.
Restaurant visits have also leveled off nationally, including in states that haven’t begun to close down again, according to data from OpenTable, the reservations website.
“This suggests that renewed fears about the virus, rather than government restrictions, are driving the pullback in activity,” said Andrew Hunter, senior U.S. economist at Capital Economics, a forecasting firm.
Data from Kronos, which produces work-scheduling software for small businesses, reinforces evidence that the recovery of the job market is faltering.
In the week that ended July 4, layoffs among Kronos’ clients actually rose and hirings declined. Companies are now laying off an average of nearly three workers for every new hire, the company’s data shows.
And in the retail industry, the number of shifts worked changed little last week after steady increases in previous weeks. David Gilbertson, a vice president at Kronos, said this suggests that consumer demand in many cases hasn’t picked up enough to justify more employees.
“Everything that’s going to be open is open,” Gilbertson said. “Now, we just need more people to come in and start spending money before things can pick up again.”
Several companies have warned in recent days that more layoffs are coming. Levi’s, the iconic jeans maker, said it will cut 700 corporate jobs. United Airlines has warned 36,000 of its employees—nearly half its workforce—that they could lose their jobs in October. (Airlines aren’t allowed to cut jobs until then as a condition of accepting billions of dollars in government rescue aid.)
The renewed threat of job losses is arising just as a federal program that provides $600 a week in unemployment benefits, on top of whatever jobless aid each state provides, is to expire at the end of this month. Congressional leaders have said they will take up some form of a new rescue package when lawmakers return later this month from a two-week recess.
Administration officials have expressed support for additional stimulus. But Senate Republicans have opposed extending the $600 a week in unemployment benefits, mainly on the ground that it discourages laid-off people from returning to work. House Democrats have pushed to extend the $600 a week through January.