News

Layoffs still piling up as jobless claims remain stubbornly high


Another 650,000 people had new claims processed for Pandemic Unemployment Assistance last week, the program for self-employed and gig workers, up slightly from 630,000 the week before.

The total number of people claiming unemployment insurance ticked up slightly, to 26.5 million for the week ending Sept. 12.

The unemployment rate was 3.5 percent in February but then jumped quickly to nearly 15 percent in April as U.S. employers laid off more than 20 million people due to the coronavirus pandemic. Employers have added back roughly half of the lost jobs since then, but many Americans remain unemployed. President Trump has said the economy is roaring back to life but a string of new layoff announcements show how some companies are still struggling to adjust to the uneven economic recovery, particularly as some industries remain very weak.

Several companies in recent days have announced sizable corporate layoffs, including 28,000 people at Disney from its theme park division, 3,800 people at the insurance company Allstate, and the announcement of tens of thousands of additional furloughs at American Airlines and United Airlines. Numerous industries are under severe strain. Continental, the German tire company, announced plans to cut as many as 30,000 jobs worldwide, and Marathon Petroleum has also begun a new round of layoffs.

“There is clearly a stalling out in the improvement in the domestic labor force,” said Joseph Brusuelas, the chief economist at RSM. “In particular, the rise in the number of persons on unemployment insurance and the increase in the number of people on PUA need to be monitored, because that signals we’re likely to have a sustained issue over the next couple of years inside the labor market, particularly pertaining to transportation, leisure, hospitality in general, aviation and hotels in particular.”

There are several reasons for the new rounds of layoffs.

Americans haven’t resumed traveling at the pace they did before the pandemic, putting a lot of pressure on airlines and companies that rely on tourism and visitors. Also, emergency government aid programs for businesses and households have mostly expired, leaving Americans with less money for spending.

The Commerce Department on Thursday reported that personal incomes fell $543.5 billion, or 2.7 percent, in August and that disposable personal income also fell. Consumer spending, meanwhile, grew 1 percent in August. Consumer spending is typically seen as the biggest engine in the U.S. economy.

Economists have started talking less about returning to a pre-covid normal, and more about what the new economy will emerge as entire industries have been shaken to their core.

“Clearly the covid shocks have led to an economy in transition,” said Chester S. Spatt, an economist at Carnegie Mellon University. “Even once we get back to full employment, the jobs aren’t going to be the same as the old jobs. People talk a lot about when we return to normal, but I don’t think normal is defined as the way we did things before.”

The White House and congressional Democrats are trying to negotiate another economic relief package, with talks continuing on Thursday. Both sides say they want more small business aid, jobless benefits and stimulus checks, but they remain far apart on other issues. A deal doesn’t appear imminent.

Checkout latest world news below links :
World News || Latest News || U.S. News

Help us to become independent in PANDEMIC COVID-19. Contribute to diligent Authors.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button
SoundCloud To Mp3