Layoffs Keep Coming, 27 Weeks Into the Crisis

Layoffs Keep Coming, 27 Weeks Into the Crisis

About 870,000 people filed for state unemployment benefits in the week ending September 19, the Labor Department said Thursday, a slight increase from the week before on a seasonally adjusted basis and well above economists’ expectations. An additional 630,000 people filed claims for Pandemic Unemployment Assistance, the federal program for self-employed and gig workers.

Taking all state and federal insurance programs together, about 26 million people were receiving some kind of unemployment benefits in the week ending September 5, a drop of more than 3 million from the week before, the weekly report said. (However, a substantial portion of that decrease came from California, as the state eliminated duplicate and fraudulent cases from its data.)

Nearly 62 million jobless claims have been filed since the pandemic began.

The jobs crisis isn’t over. As economists have been saying for some time now, the job-loss numbers are better than they were at the beginning of the pandemic, but still far above levels seen in any economic crisis since the Great Depression. “It’s just an ongoing crisis in the labor market,” said economist Heidi Shierholz of the Economic Policy Institute.

This week’s numbers are “an indicator of the pain that’s still out there,” Ethan Harris of Bank of America told Bloomberg. “And it’s consistent with the idea that we’re getting past that phase where we’re kind of rebounding from that shutdown, and now we’re more to the grinding-forward phase with this massive headwind from the labor market.”

Joseph Brusuelas, chief economist at the consulting firm RSM, said the “stalling out suggests that the easy gains of the recovery’s early stages are likely in the rear-view mirror and the hard work of digging out of the economic abyss lies ahead.”

Winter could be worse. AnnElizabeth Konkel, an economist for the career site Indeed, told The New York Times that the apparent slowdown in the job market recovery in recent weeks is particularly worrisome given that cold weather will start arriving soon, which could force some businesses to curtail their operations or even close amid worries about spreading the virus indoors. “We’re losing steam, which is definitely not good heading into the winter,” she said.

Calls for more stimulus. The report provided further evidence for some economists that another round of fiscal stimulus will be needed. “The recovery is losing momentum and further fiscal stimulus is needed to support jobs and incomes,” Bloomberg economist Eliza Winger said.