3 Million More in US Seek Jobless
Benefits Amid COVID Pandemic
May 14, 2020
The surge of unemployment compensation claims eased a bit in the
U.S. last week, the Labor Department reported Thursday, but nearly
another 3 million workers still sought benefits as the coronavirus
pandemic continues to batter the world’s largest economy.
In two months now, 36.5 million jobless workers have filed for
compensation, more than one of every five employees in the U.S.
labor force of more than 164 million.
The government last week said the official April unemployment rate
was 14.7%, but key Trump administration economic officials say it
likely is higher and could approach 25% in the coming weeks. The
government says the national economy dropped 4.8% in the first
quarter, but that was before the full impact of the pandemic became
Congress and President Donald Trump have already authorized $3
trillion in aid to most Americans and businesses. The
Democratic-controlled House of Representatives wants to boost the
assistance even further, but Republican lawmakers are balking, while
the president has adopted a wait-and-see stance.
Trump, in an interview Thursday on Fox Business, contended that
Democrats want to see the American economy fail to bolster the
chances of former Democratic Vice President Joe Biden to defeat him
in the November presidential election.
“The less successful we are in reopening, the better they are, maybe
for an election," the president said. "They would rather see our
country fail, and you know what that means, because part of failure
is death, than have me get elected.”
Federal Reserve Chairman Jerome Powell, head of the country’s
central bank, warned Wednesday that the American economy could
endure a multi-year recession if more aid is not authorized for
workers. He said that 40% of American households earning less than
$40,000 a year lost jobs in March.
“Additional fiscal support could be costly but worth it if it helps
avoid long-term economic damage and leaves us with a stronger
recovery,” Powell said in a videoconference with the Peterson
Institute for International Economics.
He called the upheaval in the U.S. the “biggest shock our economy
has felt in modern times,” saying the country is likely to face an
“extended period” of weakness.
“The record shows that deeper and longer recessions can leave behind
lasting damage to the productive capacity of the economy,” Powell
said. “Avoidable household and business insolvencies can weigh on
growth for years to come.”
Treasury Secretary Steven Mnuchin and other Trump economic advisers
say the downturn is significant but are predicting an upswing in the
second half of the year, continuing into 2021. Nonetheless, the
Congressional Budget Office is predicting that the country’s
unemployment rate will still be at 9.5% at the end of next year.
U.S. workers filing for jobless benefits normally are paid slightly
less than half their normal salaries. But these payments are
currently being augmented during the pandemic with $600-a-week
supplements from the federal government for four months.
The peak of the unemployment benefit claims may have come in late
March with 6.9 million workers filing for the jobless compensation.
The weekly pace of claims has diminished each of the last eight
weeks since then, but the millions of claims have still been
unparalleled over decades of U.S. economic history, reaching back to
the Great Depression in the 1930s. The number of claims has far
exceeded those made during the Great Recession in 2008.
Still, U.S. commerce is slowly edging back to life even as the U.S.
coronavirus death toll has topped 84,000, the biggest national total
across the world, and the number of confirmed coronavirus cases
totals nearly 1.4 million. The projected U.S. death toll is 147,000
throughout the 50 U.S. states have moved toward reopening of parts
of their economies, in some cases telling restaurant owners they can
reopen if they maintain safe two-meter distancing between customers
or let shop keepers reopen if they limit the number of customers at
any one time.
In some instances, Americans eager to escape the weeks-long
confinement of their homes have crowded into restaurants whose
owners have defied orders to limit the number of people they could
serve. The customers have rarely worn masks to curb the possibility
of infecting others.
Some factories could reopen later in May, although it is not clear
how workers will be able to maintain safe distancing to limit their
chances of catching the virus.