The number of workers continually claiming unemployment insurance also rose, by about 867,000 workers to 17 million for the week ending July 18, up from 16.1 million for the week ending July 11. That statistic lags by a week.
An additional 830,000 new claims were filed for Pandemic Unemployment Assistance, the benefits offered to gig and self-employed workers.
“We’re still seeing a number of initial claims four months into this crisis that would have made our jaws drop before,” said Nick Bunker, an economist at Indeed Hiring Lab.
The numbers come as the extra $600 in federal unemployment benefits is set to expire, which many economists have credited with shoring up the economy during the crisis. Republicans and Democrats are wrangling over how much of that money to reauthorize; Democrats want the full $600 extended through January, while some Republicans have proposed reducing it to $200 a week.
Companies that have announced layoffs in recent weeks include biotech firm Genentech; ad agency Wieden & Kennedy; truck manufacturer McNeilus; Bon Appétit Management Co., which provides food service at sports stadiums and arenas in California; cultural institutions such as the Science Museum of Minnesota and the Monterey Bay Aquarium; and many casinos.
The July unemployment numbers have been so troubling that Beth Ann Bovino, the chief economist at Standard & Poor’s Ratings Services, said that the firm’s estimates — made in June — of a recovery of the labor market by the end of 2023 were overly optimistic.
“It’s pretty sobering,” she said.
Federal Reserve Chair Jerome H. Powell said Wednesday that top Fed leaders have noted weakness in the labor market in July, especially among those who work for small businesses, in part because of rising cases of the coronavirus in some parts of the country.
Bunker said that job postings on the Indeed site began to inch upward consistently since May, although they remain far below typical levels. But a new surge in cases has slowed the postings in cities such as Los Angeles and Miami, he said.
“It does seem to be leading to employers pulling back on hiring,” he added.