WASHINGTON (NewsNation) — The number of laid-off workers applying for unemployment aid fell below 1 million last week for the first time in five months.
The Labor Department said applications fell to 963,000, the second straight drop, from 1.2 million the previous week. The decline suggests that layoffs are slowing, but last week’s figure still exceeds the pre-pandemic record of just under 700,000.
The coronavirus pandemic, the shutdowns that are meant to fight it and the reluctance or inability of many people to shop, travel or eat out are continuing to weaken the economy and force companies to cut staff.
In a hopeful sign, the rate of new confirmed viral cases has declined in the past couple of weeks, though it remains far above the rates that prevailed in May and June, data from Johns Hopkins University shows.
All told, fewer people are also continuing to receive state jobless aid. That figure dropped to 15.5 million, from 16.1 million the previous week.
For months, the unemployed had also been receiving the $600 a week in federal jobless aid on top of their state benefit. But the federal payment has expired, and negotiations in Congress to extend that benefit, likely at a lower level of payment, fell apart.
Michelle Meyer, an economist at Bank of America Merrill Lynch, said that the loss of the additional aid will reduce Americans’ incomes by $18 billion a week.
“That’s a big hit to purchasing power,” she said.
Last week, President Donald Trump issued an executive order that would provide $300 a week in federal aid to the jobless to replace the expired $600-a-week benefit.
For states to set up systems to distribute a new $300 federal jobless benefit, their labor departments would need more guidance from the federal government, noted Michele Evermore, a senior researcher at the National Employment Law Project. The money, which is allocated to come from a federal disaster relief fund, would likely require states to hire more people and possibly contract with software vendors to establish a system to process the payments, Evermore said.
“I can’t imagine that this goes up in less than a month anywhere,” she said.