The number of people who filed for first-time unemployment benefits reached 840,000 last week, according to data released Thursday by the Department of Labor. Economists surveyed by Dow Jones had forecast claims would fall to 825,000.
While initial claims have held steady for the past six weeks, they remain at historically elevated levels.
“New claims appear to have settled into a still historically high pattern, numbering in the 800,000 range since late August,” said Mark Hamrick, senior economic analyst at Bankrate. “The intermediate-term outlook remains quite concerning for several reasons, although we remain hopeful that the eventual availability of effective and safe vaccines will get us to a better place on a number of fronts.”
Women and minorities, two groups that are over-represented in the service industries, remain the most heavily affected by the country’s sweeping layoffs.
Mothers of young children are shouldering more of the responsibility of online schooling, forcing them to abandon their career, Federal Reserve Chairman Jerome Powell noted in a keynote speech at an economic forum on Tuesday.
“The longer it goes on, the more likely there is some lasting damage,” Powell said. “For many people, and it’s a lot of women, it’s winding up being in the home with young children who really should be in school and you would much prefer to be working. So it’s a real issue.”
Last month’s employment report showed that four times as many women than men had dropped out of the workforce, with 865,000 leaving their job, compared with 216,000 men, according to data from the Labor Department.
Powell on Tuesday also urged lawmakers to introduce more fiscal relief into the economy, saying that the risk of doing nothing far outweighed the risk of handing out too much support and building more federal deficit.
“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” Powell said. “Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy and holding back wage growth. By contrast, the risks of overdoing it seem, for now, to be smaller. Even if policy actions ultimately prove to be greater than needed, they will not go to waste.”
While President Donald Trump tweeted his approval of Powell’s comment, the president has called off any negotiations on a stimulus package until after the Nov. 3 election, leaving millions of out-of-work Americans struggling to provide food, pay their bills, and remain in their home.
“A lack of another round of fiscal aid will result in a much slower path of growth heading into the end of the year,” Joseph Brusuelas, chief economist at RSM, told CNBC. “You’re just going to see everything slow to a grind if we don’t see anything put forward.”
Landlords and tenants say they are bracing for an economic cliff with roughly 12 million renter households behind on their rent by Sept. 14, according to a September report released by the National Council of State Housing Agencies.
Trump said in a Tuesday tweet that he would approve funding for specific struggling industries, such as airlines and small businesses, which is short of what House Democrats proposed.
Executives from the major U.S. airlines have spent months pleading for more aid to secure the survival of an industry that has been decimated by the plunge in travel demand. Hundreds of thousands of airline workers and related industries could lose their jobs if more financial aid is not secured. Last week, around 33,000 workers were furloughed after Congress failed to pass a last-minute deal to extend coronavirus relief aid to the embattled airline industry.
The International Air Transport Associations said Tuesday that the slow recovery in air travel “will see the airline industry continuing to burn through cash at an average rate of $5 to $6 billion per month in 2021.”
In the meantime, “Pilots will do what they need to do to support their families,” Cheryl Cage, an aviation consultant, told NBC News. “They’ll be Uber drivers if they have to, until they find something more permanent.”