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VOL. 122, NO. 31 ONLINE EDITION August 4, 2020
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Jobless claims rise as $600 benefit nears end
The nation got another dose of bad economic news as the number of laid-off workers seeking jobless benefits rose for the first time since late March, intensifying concerns the resurgent coronavirus is stalling or even reversing the economic recovery.  

And an extra $600 in weekly unemployment benefits, provided by the federal government on top of whatever assistance states provide, is set to expire July 31, though this is the last week recipients will get the extra funds. It is the last major source of economic help from the $2 trillion relief package that Congress approved in March. A small business lending program and one-time $1,200 payment have largely run their course.  

With the count of U.S. infections passing 4 million and the aid ending, nearly 30 million unemployed people could struggle to pay rent, utilities or other bills, and economists worry that overall consumer spending will drop, adding another economic blow.  

More than 1.4 million people applied for jobless benefits in the most recent week, the Labor Department said, up from 1.3 million the previous week. That is the first increase since March and 18th straight week that it has topped 1 million. Before the pandemic, applications had never exceeded 700,000. An additional 975,000 people applied for aid under a separate program that has made self-employed and gig workers eligible for the first time.  

The weakening of the labor market has raised fears the economy will shed jobs again in July, after two sharp hiring gains in May and June.  

Analysts say the economy canít improve until authorities can control the spread of the virus, a need that is complicating the reopening of businesses and schools.  

Adm. Brett Giroir, assistant secretary of health and a member of the Trump administrationís coronavirus task force, even suggested another shutdown might be necessary. He noted that nearly universal mask-wearing, sharp restrictions on restaurant occupancy and shutting down bars were nearly as effective in controlling the virus as another shutdown of all nonessential businesses.  

ďNow, if you donít do that, and people donít achieve those goals, particularly mask-wearing, there may be no alternative,Ē Giroir said on MSNBC.  

Congress is negotiating another aid package that could extend the extra unemployment support, though likely at less than $600. With the extra $600, roughly two-thirds of the unemployed are receiving more than they earned at their former jobs, research has shown. Republicans argue that itís discouraging people from returning to work.  

On July 23, Senate Republicans unveiled a $1 trillion package that would replace the $600 with an amount that would bring a laid-off workerís jobless benefits to 70% of their previous income. Both parties have agreed on another $1,200 stimulus check.  

Democrats in the House approved a $3 trillion package that would extend the $600 through January. Given the limited time available, Treasury Secretary Steven Mnuchin urged a bill dealing with jobless benefits and aid to schools be considered. Democrats say the Republican plans are not enough.  

To stop the spread of the virus and its resulting economic impact, more states are adding or broadening mask requirements. A new survey from The Associated Press-NORC Center for Public Affairs Research says three out of four Americans, including a majority of Republicans, favor requiring people to wear face coverings outside their homes.  

In a small step toward normalcy, many Americans eagerly welcomed baseballís opening day, which arrived four months late.  

In contrast to the U.S., the outlook has brightened for some other major economies. Europe is forecast to rebound next year after it managed to shrink its coronavirus caseload. Unemployment in the 19 countries that use the euro has remained contained, reflecting aggressive government efforts to keep workers on payrolls.  

China has become the first major economy to grow since the start of the pandemic. Economists say China will likely recover relatively fast because of the Communist Partyís move to impose early and intensive anti-disease measures.  

In the U.S., applications for unemployment benefits declined in many states hard hit by the virus, including Texas, Florida, Georgia and Arizona. But claims rose in other states seeing increases, including Louisiana, California and Tennessee.  

The U.S. government said the total number of people receiving jobless benefits fell 1.1 million, to 16.2 million. Itís a hopeful sign that even as layoffs remain high, some companies are recalling workers. Yet that figure is still roughly 10 times what it was before the pandemic.  

Unemployment aid accounted for 6% of all U.S. income in May, a greater share than even Social Security. Economists say itís one reason why retail spending rebounded as quickly as it did in May and June.  

Real-time measures of the economy suggest companies are pulling back on hiring and more small businesses are closing permanently. Credit card spending has been stuck at about 10% below year-ago levels for nearly a month, according to JPMorgan Chase, after having risen steadily from mid-April to mid-June.  

Data from the consumer-review website Yelp, which tracks millions of small businesses, shows more such companies are permanently shutting down. Nearly 73,000 small businesses have closed for good since the pandemic intensified in March, up 28% from mid-June.  

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