WASHINGTON - The U.S. Labor Department reported Thursday that 881,000 workers filed for unemployment compensation last week, only the second time the weekly figure has dropped below a million claims since the coronavirus pandemic wreaked havoc on the American economy starting in March.
Millions of workers remain unemployed in the United States, although economists are predicting that the jobless rate for August could dip slightly below 10% when it is announced Friday, a steady improvement from the April unemployment rate of 14.7%, but still well above the country’s five-decade low of 3.5% recorded in February.
U.S. employers have called back millions of workers who were laid off during mandatory business shutdowns earlier this year, yet some hard-hit businesses have been slow to ramp up their operations again or have closed permanently, leaving workers idled or searching for new employment.
Until the end of July, the national government sent an extra $600 a week to unemployed workers on top of less generous state jobless benefits. With Trump administration negotiators and opposition Democratic lawmakers unable to reach an agreement on how long to extend the federal benefit and for how much, President Donald Trump signed an executive order calling for $400 a week in extra payments for a few weeks.
But only a handful of state governments have started delivering the reduced payments to jobless workers, although 41 of the 50 states have said they will do so in the coming weeks.
Congress and the White House remain at odds on how much to spend on a new coronavirus relief package for unemployed workers, hard-hit businesses and financially burdened state and local governments. The Trump administration is calling for a $1.3 trillion package, while the Democrats want $2.2 trillion.
The unchecked coronavirus pandemic has now killed more than 185,000 people in the U.S., according to Johns Hopkins University figures, and caused the economy to plummet.
On Wednesday, the nonpartisan Congressional Budget Office reported that the amount of debt held by the U.S. government by the end of 2020 will roughly equal the size of the American economy and will surpass it in 2021.
The CBO said the fiscal imbalance has not been seen in the United States since the end of World War II.
By the end of this year, the congressional analysts said the amount of debt owed by the U.S. will amount to 98% of the nation’s gross domestic product of about $19 trillion and surpass the U.S. economy’s size next year.
The reason is simple: vast government aid to businesses, most U.S. households and unemployed workers impacted by the coronavirus pandemic has ballooned the government’s spending deficit.
The U.S added 1.8 million jobs in July, fewer than the job gains in May and June, an indication that hiring had slowed as a second wave of coronavirus infections in the U.S. surged in June and more than doubled by mid-July, forcing employers to close their businesses again.
Economists say that the U.S. possibly added about 1.3 million new jobs in August, but it was a figure that was inflated temporarily by the Census Bureau’s hiring of about 240,000 workers to help conduct the once-a-decade count of the U.S. population.