WASHINGTON, D.C. (Texas Insider Report) — The number of laid-off workers applying for Weekly Unemployment Aid fell below 1 million last week for the first time since the CoronaVirus intensified five months ago. The decline may suggest the U.S. economy is rebounding, as layoffs nationwide are slowing or being reversed.
- The Labor Department said Weekly Unemployment Aid applications fell to 963,000,– the second straight weekly drop – down from 1.2 million the previous week.
- Overall, fewer people are now receiving State Jobless Aid as they return to work and employment.
- The State Jobless Aid figure dropped to 15.5 million nationwide, from 16.1 million the previous week.
For months, the unemployed had also been receiving a federally-provided $600 a week in Jobless Aid on top of their State Benefit – providing critical support for millions of laid-off Americans.
But after federal aid payments expired at the end of July – and as Congressional Democrats refused to work with President Donald Trump to pass legislation extending the benefits – President Trump signed an Executive Order last weekend to provide continuance of the aid.
The Supplemental Federal Aid enables many jobless Americans to afford rent, food and utilities.
Unemployment benefits have accounted for roughly 5% of national income since April, a larger share than even Social Security. The loss of the $600 per week assistance could have shrunk benefits for the average recipient by one-half to three-quarters.
Michelle Meyer, an economist at Bank of America Merrill Lynch, says the loss of that additional aid could reduce Americans’ disposable incomes by up to $18 billion a week nationwide.
“That’s a big hit to purchasing power,” Meyer said.
Last weekend, President Donald Trump issued an Executive Order providing $300 a week in Federal Jobless Aid to replace the expired $600-per-week benefit. Administration officials said Wednesday those benefits should be flowing to Americans within the next two weeks.
In addition to Americans applying last week for state benefits, nearly 489,000 others sought jobless aid under a new program that has made self-employed and gig workers eligible for the first time.
Including that group, the Labor Department says 28.2 million Americans are receiving some form of Unemployment Benefits, though that figure may be inflated by double-counting by some states.
The COVID-19 CoronaVirus has continued to debilitate the U.S. economy for months. While the number of newly confirmed cases has declined over the past couple of weeks, it remains above levels that prevailed in May and June.
Twenty-three states have paused or reversed their business re-openings.
The economic and business shutdowns meant to fight the CoronaVirus pandemic – and the reluctance or inability of Americans to shop, travel or eat out – continues to dampen overall economy activity nationwide, and has forced companies across the nation to cut or not rehire staff.