WASHINGTON – The number of Americans applying for unemployment benefits in the two months since the coronavirus took hold in the U.S. has swelled to nearly 39 million, the government reported Thursday, even as states from coast to coast gradually reopen their economies and let people go back to work.
More than 2.4 million people filed for unemployment last week in the latest wave of layoffs from the business shutdowns that have brought the economy to its knees, the Labor Department said.
That brings the running total to a staggering 38.6 million.
The number of weekly applications has slowed for seven straight weeks. Yet the figures remain breathtakingly high – 10 times higher than normal before the crisis struck.
It shows that even though all states have begun reopening over the past three weeks, employment has yet to snap back and the outbreak is still damaging businesses and destroying jobs.
“While the steady decline in claims is good news, the labor market is still in terrible shape,” said Gus Faucher, chief economist at PNC Financial.
Federal Reserve Chairman Jerome Powell said over the weekend that U.S. unemployment could peak in May or June at 20% to 25%, a level last seen during the depths of the Great Depression almost 90 years ago.
Return to work
Across the U.S., some companies have begun to rehire their laid-off employees as states have eased restrictions on movement and commerce. On Monday, more than 130,000 workers at the three major American automakers, plus Toyota and Honda, returned to their factories for the first time in two months.
Still, major employers keep cutting jobs. Uber said this week that it will lay off 3,000 more employees because demand for rides has plummeted. Digital publishers Vice, Quartz and BuzzFeed, magazine giant Conde Nast and the owner of The Economist magazine announced job cuts last week.
Stephen Stanley, chief economist at Amherst Pierpont, said the latest layoffs may be particularly worrisome because they are happening even as states reopen.
“There's a high probability that those layoffs could persist for longer than those that were a function of (businesses) just being closed,” Stanley said.
The latest figures do not mean 38.6 million people are out of work. Some have been called back, and others have landed new jobs. But the vast majority are still unemployed.
An additional 1.2 million people applied for unemployment benefits last week under a federal program that makes self-employed, contractor and gig workers eligible for the first time. But those figures aren't adjusted for seasonal variations, so the government doesn't include them in the overall number of applications.
Alexis Weber, laid off from her job as a bartender at an Atlanta restaurant, said it was a struggle to secure unemployment benefits – she filed April 1 and had to wait until early May to get her first payment. She is not sure when her employer will want her back, or if she will want to return.
“Social distancing doesn't really apply very well to the hospitality business,” Weber said. “I don't feel safe returning right now.”
One rehired worker, Norman Boughman, received an email last week from his boss at a secondhand clothing store in Richmond, Virginia, where he worked part time, asking him to return. But even with a mask, he worries about his health.
“We're having to sort through people's things, and I feel like that puts us at a higher risk,” he said.
European countries also have seen heavy job losses, but robust government safety-net programs in places like Germany and France are subsidizing the wages of millions of workers and keeping them on the payroll.
App falls short
Meanwhile, doubts are growing over ambitious plans by European governments to use contact-tracing smartphone apps to fight the spread of the virus as they ease their lockdowns.
The apps can help authorities determine whether people have crossed paths with those who are infected.
British Security Minister James Brokenshire told the BBC that an app that was supposed to be introduced by mid-May is not ready, citing “technical issues.” Similarly, France delayed last week's roll-out of its app because of problems and privacy concerns.
As for the search for a vaccine, drugmaker AstraZeneca said it has secured agreements to produce 400 million doses of a still experimental and unproven formulation that is being tested at the University of Oxford. It is one of the most advanced projects in the international race for a vaccine.