New Labor Market Concerns as Jobless Claims Rise for the First Time Since March

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First time jobless claims rose for the first time in four months, contrary to the expectations of many economists. More than 1.42 million workers filed for unemployment in the week ending July 18. Another 975,000 gig workers and self employed workers, who don’t qualify for regular state unemployment benefits, applied for Pandemic Unemployment Assistance (PUA), also an increase from the previous week. That means the total number of workers filing for some sort of unemployment last week topped 2.4 million. The bad news continued, as more than 32 million workers still receive unemployment.

This makes 18 straight weeks with more than 1 million first time jobless claims. The previous record prior to 2020 was 695,000, set in 1982. The week prior to the massive layoffs resulting from the lockdowns saw 282,000 new jobless claims.

From the New York Post:

“The head-in-the-sand view that this will pass is being overwhelmed by the reality of the storm that churns the sand,” Diane Swonk, chief economist at Grant Thornton and a Federal Reserve adviser, told The Post. “It’s feeling like quicksand and we can’t allow it to be that way.”

Jobless Claims QUADRUPLED Previous Record

The labor market does not appear to be recovering from the extended CCP coronavirus pandemic lockdowns.

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Reuters reports:

“There is no gradual and uneven recovery for the labor market,” said Chris Rupkey, chief economist at MUFG in New York.

“Washington policymakers looking for signs that additional stimulus is necessary can judge for themselves with the millions and millions of jobless workers getting unemployment benefits. The economy cannot carry on for long if it has to drag almost 32 million unemployed workers with it.”

Initial claims for state unemployment benefits increased 109,000 to a seasonally adjusted 1.416 million for the week ended July 18. That was the first rise in applications since the week ending March 28, when claims raced to a record 6.867 million as nonessential businesses like restaurants and gyms were shuttered to slow the spread of the coronavirus.

Bloomberg reported, “The Census Bureau’s weekly Household Pulse survey showed the number of employed Americans dropped by about 6.7 million from mid-June through mid-July, the majority of that in the second week of July from the first.”

A new round of layoffs and business bankruptcies has resulted from new, more strict lockdown orders by governors in states seeing rising numbers of COVID-19 infections. This has driven jobless claims, with the unemployment rate sure to rise again when the numbers come out in August.

The longer these lockdowns go on, the less likely the U.S. economy will see a rapid recovery.

The total number of workers who have filed new jobless claims since the widespread lockdowns began in March topped 52 million with today’s news.

Jeff Reynolds is the author of the book, “Behind the Curtain: Inside the Network of Progressive Billionaires and Their Campaign to Undermine Democracy,” available at www.WhoOwnsTheDems.com. Jeff hosts a podcast at anchor.fm/BehindTheCurtain. You can follow him on Twitter @ChargerJeff, and on Parler at @RealJeffReynolds.

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More Than 18% of American Workers Have Now Filed for Unemployment

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