One million people filed for unemployment benefits last week in the US as the coronavirus pandemic continued to take a historic toll on the job market.
It was the second week in a row that claims passed the million mark after briefly dipping below that figure in early August.
New applications for unemployment have remained stubbornly high for months even as the number of coronavirus cases are declining. At about 1m claims a week they are five times as high as the average 200,000 weekly claims before the pandemic.
In the week ending 22 August just over 1m claims were filed, 98,000 fewer than the previous week.
While the US has gained jobs over the last three months, millions more still remain out of work and the ongoing economic impact of the pandemic is spreading. Initially the job losses fell most heavily on the service, leisure and hospitality industries as restaurants, bars and hotels closed down.
The impact of the recession is now spreading. This week American Airlines announced it would cut 19,000 jobs by 1 October and Delta said it furlough more than 1,900 pilots unless it can reach a cost cutting deal with unions. United Airlines announced earlier this summer that it could cut 36,000 positions later this year.
“Though we are seeing a meaningful decline in new Covid-19 cases, the trends in economic indicators have not changed significantly. There continue to be signs that the recovery is slowing at best and at worst is reversing somewhat,” BofA Global Research said in an investors note. “We likely need to see daily Covid-19 cases decline much more significantly in order for gains in economic activity to accelerate meaningfully.”
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