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Unemployment claims fall below 1 million for the first time since March



It was the lowest number of initial weekly requests since mid-March, when the pandemic shut down the US economy.

For 20 straight weeks, the number of people reporting unemployment for the first time steadily plummeted to more than 1 million, reaching nearly 7 million at the end of March.

While the decline is a positive sign, the numbers are still historically high. In the same week a year ago, 218,000 people applied for initial benefits.

Even during the Great Recession a little over a decade ago, unemployment claims were not as high as in the current crisis.

Another lesson from the Great Recession: it took almost five years – from its peak in 2009 to 201

4 – for the claims to go down to where they were before the financial crisis.

The last numbers are a reminder that recovery from the current pandemic recession will not be an easy or quick move.

Although the total from last week is an improvement, it does not include claims of pandemic unemployment benefits, a program created by Congress after the Covid-19 hit. Adding these, first-level cumulative claims behind the figure above one million, to 1.3 million on an unacceptable basis.

That said, economists say it is encouraging that unemployment claims are declining because it means people continue to return to work.

Persistent unemployment claims, which count people who have filed unemployment benefits for at least two weeks in a row, stood at 15.5 million on a seasonally adjusted basis. Without adjustment, the number was 15.2 million.

Counting all state unemployment programs, 28.3 million people were seeking some form of assistance in the week ending July 25th.

The CARES government act had boosted unemployment benefits by $ 600 a week by the end of July, but lawmakers in Congress continue to back their heads on the next stimulus package.
Meanwhile, over the weekend, President Donald Trump signed executive orders, including one that will provide the unemployed with $ 300 a week as part of a new “lost wages” program. Trump initially called on states to contribute an additional $ 100 a week, bringing the new total benefit to $ 400 a week. But with many states already facing budget shortfalls, this is unlikely to work. The U.S. Department of Labor said Sunday that states can calculate their weekly unemployment benefits as a requirement for sharing their cost.
Some states have had to borrow billions of dollars from the Treasury to pay unemployment benefits. As of Tuesday, California had borrowed $ 8.6 billion, while New York and Texas borrowed $ 5.7 billion and $ 2.9 billion, respectively, to help their residents.
The effectiveness and legitimacy of Trump’s executive orders remain a hot topic of discussion in Washington.

“The reality is that millions of people have lost their jobs,” said AnnElizabeth Konkel, an economist at Labor Labor. “These people are facing rising bills, and they are struggling to find work. The expiration of the expanded federal unemployment benefit of $ 600 has only added to the dire situation they face.

“Meanwhile the source of all this economic hardship, the coronavirus remains out of control,” she added.

– Tami Luhby contributed to this report.


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