Another 860,000 people applied for unemployment insurance claims last week — the 26th-straight week that unemployment claims remained above a pre-pandemic record dating to the 1960s.
The total number of people claiming unemployment insurance went up by about 100,000, to 29.7 million, as of Aug. 29, the most recent week available for this statistic.
The number of new unemployment claims has come down gradually over the last few months, but claims remain above the historical levels from before the pandemic, a sign of the continued economic head winds the country is facing.
Joe Brusuelas, the chief economist at RSM, wrote that the continued high levels of unemployment claims were a “reflection of the deep scarring in the domestic labor market and economy.”
“The pace of firings in the U.S. economy remains well above anything observed during the Great Financial Crisis,” he noted in a post on RSM’s blog.
Aaron Sojourner, a professor at the University of Minnesota and former White House economist, pointed out that the week marked exactly half a year of claims higher than any of the previous weeks dating back to 1967, since the coronavirus pandemic caused mass layoffs in March.
This makes 26 consecutive weeks (a half year!) with every week's number of new state UI claims higher than any of the prior 2,776 weeks on record back to 1967. pic.twitter.com/cruWyiNMAq— Aaron Sojourner (@aaronsojourner) September 17, 2020
Although rehiring continues apace in some of the industries most strongly affected by the virus and efforts to contain it, layoffs continue to cascade through the economy. Companies announcing layoffs in the past week include Massachusetts-based aerospace company Raytheon Technologies, which announced plans to cut 15,000 positions; Los Angeles NPR affiliate KCRW; Orlando-based theme park SeaWorld; and restaurant chain Dave & Buster’s.
Economists have been warning about the threat of a downturn in the recession since Congress failed to renew some of the hundreds of billions of dollars of aid programs that many credited with stabilizing the economy earlier in the pandemic. The supplemental $600 in unemployment insurance expired at the end of July and has been bolstered by $300 a week payment authorized by President Trump. But that payment is expiring or will expire soon in most states, after lasting about six weeks.
Congress has continued to wrangle over a new package of aid but has yet to come to an agreement. The bipartisan Problem Solvers Caucus in the House unveiled a $1.5 trillion plan on Tuesday that would include another round of stimulus payments.
Retail sales rose 0.6 percent last month, according to the Commerce Department — the fourth-consecutive month of growth, but the rate significantly has slowed from July.
On Wednesday, the Federal Reserve updated its economic projections, predicting unemployment would fall to 7.6 percent by the end of the year, and 5.5 percent by the end of 2021.
“The recovery has progressed more quickly than generally expected,” Fed Chair Jerome H. Powell said at a news conference. “Even so, overall activity remains well below its level before the pandemic, and the path ahead remains highly uncertain.”