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Unemployment claims rise for second week in a row

In yet another sign that the economic...

Posted: Jul 30, 2020 10:57 AM
Updated: Jul 30, 2020 1:30 PM

In yet another sign that the economic recovery is teetering in a resurgence of coronavirus cases, the number of Americans filing first-time unemployment claims rose for the second week in a row.

Some 1.4 million people filed for initial jobless claims last week, up 12,000 from the prior week's revised level, which was the first increase in 16 weeks, according to the Department of Labor.

The news came on the same day as a separate report showed that the US economy contracted at a 32.9% annual rate from April through June, its worst drop on record. These both added to concerns that the economy is faltering.

They also come as Congress debates whether to provide more stimulus to the nation, including extending enhanced unemployment benefits and another round of direct payments to Americans.

'The fact that initial jobless claims have risen for a second week is worrying and underscores that the nascent consumption recovery is at risk,' said Moody's Investors Service's Vice President Madhavi Bokil. 'The economic recovery is also at risk from the prospect of reduced fiscal support to households and businesses experiencing income and revenue losses.'

On an unadjusted basis, 1.2 million people filed first-time claims, down 171,000 from the week before. The seasonal adjustments are traditionally used to smooth out the data, but that has tended to have the opposite effect during the pandemic.

Continued claims, which count workers who have filed for at least two weeks in a row, stood at 17 million for the week ending July 18, up 867,000 from the prior week's revised level. This was the first weekly increase since late May. These seasonally adjusted claims peaked in May at nearly 25 million.

In addition to those filing traditional unemployment claims, nearly 830,000 people in all 50 states filed for first-time pandemic unemployment assistance last week, down more than 106,000 from the week before. More than 12.4 million claimed continued pandemic benefits across 46 states for the week ending July 11, down nearly 767,000 from the prior week.

Pandemic unemployment claims data, however, is very volatile from week to week because it may include backlogged filings.

The pandemic program was created by Congress in March to respond to the coronavirus outbreak. It provides temporary benefits to workers who typically aren't eligible for payments, including freelancers, independent contractors, the self-employed and certain people affected by coronavirus. It expires at the end of the year.

In total, 30.2 million Americans claimed jobless benefits in an array of programs for the week ending July 11, down 1.6 million from the prior week.

Congress debate over extending the $600 weekly enhancement

The weakening economic outlook comes as Congress bickers over whether to extend the $600 weekly enhancement that lawmakers passed in March to cushion Americans forced to give up their jobs because of pandemic-fueled lockdowns. The boost officially expires this Friday, but most unemployed people have already received their last payments.

House Democrats want to continue the $600 supplement into early next year, saying the economy remains too weak and jobs are still scarce.

But Senate Republicans and the White House are concerned that such a generous enhancement will deter people from returning to work and hinder the economy recovery. When combined with state benefits, the extra $600 meant that two-thirds of workers were making more on unemployment than their did in wages, according to an estimate by University of Chicago researchers.

Instead, GOP lawmakers are looking to cut the benefit to $200 a week for two months and then shift to having state and federal payments replace 70% of lost wages through the rest of the year.

Economists, however, say the federal supplement has helped prop up the economy as the virus rages across the nation, and withdrawing it too soon could stymie the recovery.

'The looming expiration of federal unemployment benefits without a clear-cut replacement threatens a chunk of consumer spending power that has sustained households and made its way back into the economy,' said Greg McBride, Bankrate.com's chief financial analyst.

Although the federal government was footing the bill for the $600 supplement, states are still exhausting their unemployment trust funds. Some 10 states have borrowed nearly $17.2 billion from the federal government to pay their share of jobless benefits, which typically lasts 26 weeks.

The jobless are guaranteed to get their weekly payment, regardless of whether the state has to take a loan from the federal government. It's not unusual for states to borrow during tough economic times.

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Indiana Coronavirus Cases

Data is updated nightly.

Cases: 329008

Reported Deaths: 5663
CountyCasesDeaths
Marion44793862
Lake28485466
Allen19005303
Elkhart17828233
St. Joseph17409235
Hamilton13830170
Vanderburgh10166127
Tippecanoe907430
Porter865088
Johnson6866169
Hendricks6516158
Vigo634791
Monroe555550
Clark536278
Madison5335122
Delaware5130103
LaPorte486297
Kosciusko477541
Howard370378
Bartholomew340965
Warrick340173
Floyd332578
Wayne332384
Marshall314946
Cass306331
Grant290350
Hancock279357
Noble267047
Henry259037
Boone258855
Dubois247732
Dearborn233631
Jackson230634
Morgan226443
Gibson198229
Knox195221
Shelby194957
Clinton186822
DeKalb186733
Lawrence186049
Wabash175222
Adams173823
Miami173817
Daviess164945
Fayette155434
Steuben155115
Jasper153613
Montgomery152129
Harrison149924
LaGrange149331
Ripley148019
Whitley144315
Huntington136310
Decatur135643
Putnam133428
White133422
Wells132330
Clay130924
Randolph130321
Jefferson127016
Posey126918
Scott118021
Greene108553
Sullivan104416
Jay103314
Starke96124
Jennings93214
Spencer8998
Fulton87819
Perry86121
Fountain8288
Washington8267
Franklin74027
Carroll72913
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Owen6528
Tipton61127
Parke6086
Newton57912
Rush5768
Blackford57112
Pike53720
Pulaski43415
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Benton3703
Brown3645
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Union2822
Switzerland2705
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Ohio2417
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