The number of gig and formerly self-employed workers who also applied for jobless benefits newly available to them under the expanded federal program went up to 705,000, from 620,000 the week before, according to the Labor Department.
The total number of people receiving benefits edged down to 20.9 million, from a revised 21.3 million the previous week, a staggering toll on the labor force. More than 44 million people have applied for unemployment benefits during the pandemic — about 29 percent of the workforce.
“Some may have returned to work,” said Joseph Brusuelas, the chief economist at RSM, an accounting firm network. “But that’s a stunning number nonetheless.”
The numbers add to the complicated economic outlook U.S. policymakers face as they push to reopen for business while also preventing further spread of the virus.
President Trump has hailed the signs that the economy may have already hit bottom — the unemployment rate dropped in May, surprising many economists — as an indication the recovery is taking shape. But the official unemployment rate remains higher than at any time since the Great Depression.
Meanwhile, data collection errors disclosed by the Bureau of Labor Statistics have contributed to the official unemployment rate registering lower than what it should be, BLS has said.
Some jobs, especially in the restaurant, retail and service sectors, are bouncing back as local economies reopen, but there are concerns about a second wave of layoffs. On Wednesday, Federal Reserve Board Chair Jerome H. Powell warned that some of the jobs lost won’t come back easily or at all.
“Hiring appears to be picking up, but is far below what the labor market needs for a robust recovery,” Nick Bunker, an economist at Indeed, said in a statement.
Though 1.5 million claims is among the lowest numbers of those seeking jobless benefits since the pandemic first started affecting the U.S. economy in mid-March, it’s still more than double the pre-pandemic record of 695,000 from 1982.
“We’re seeing devastating tolls in lives and lost economic output from the covid pandemic,” said Mark Hamrick, an economist at Bankrate. “The elevated claims are a reminder that this two-sided crisis is still very much with us.”
Federal Reserve officials are forecasting a slow and uneven recovery, saying Wednesday they expect unemployment to fall to 9.3 percent by the end of the year as the economy shrinks 6 percent.
Powell said more aid from Congress and the central bank will probably be needed.
Nicole Moore, a former part-time Lyft driver and organizer with Rideshare Drivers United, spoke about the challenges drivers have faced as their work has been wiped out so quickly.
“People are so stressed,” she said. “I had a note that just broke my heart from someone. … ’Dear sir, I can’t explain the situation I’m in but I don’t have enough food for myself and my kids. Can you help me get my unemployment?’ Those are the types of things that we’re seeing. It scares me what we’re going through.”
Moore said gig workers in California, where she is based, still face delays in having their unemployment claims processed because of the resistance of many tech companies to classifying their workers as employees. Pandemic Unemployment Assistance is the new program created to give self-employed and gig workers relief, but it comes with drawbacks.
For example, it calculates benefits based on net income, not gross, like most states use to calculate traditional unemployment insurance. Drivers’ net incomes are weighed down by hefty expenses they pay out of pocket for vehicle maintenance and upkeep.
States, too, appear to be challenged by the new program. Brusuelas pointed out that nine states and the District of Columbia did not report any new PUA claims for the most recently available data.
“We are working here with an incomplete set of information, which will have to be completed in order to move into alignment with the BLS,” he said. “The magnitude of the shock caused by the pandemic is so large that we might find that neither is so precise, and we might find we should assume that the rate of unemployment stands at 15 to 20 percent, rather than 10 to 15 percent.”