- More than 1.3 million Americans applied for unemployment benefits last week
- Resurgence in COVID-19 cases forces reversal or pause of reopening plans in several states
- Companies warn of potential need for further layoffs as economy regains only about one-third of jobs lost in March and April
Although unemployment applications and the number of people receiving jobless benefits fell slightly in the past week, the figures have remained steady compared to sharper drops in recent months. An uptick in COVID-19 cases in 38 states has raised fears of a potential “double dip” recession as six states (representing one-third of the economy) reversed their reopening plans and 15 others put them on hold.
A total of 1.3 million people filed for unemployment last week, down from 1.4 million in the previous week but more than double the pre-pandemic record. The number of people receiving unemployment compensation fell by 700,000 to 18 million.
While the June jobs report showed a solid gain in jobs and a drop in the unemployment rate, it occurred before the resurgence in COVID-19 cases and only represented a recovery of about one-third of the jobs lost in March and April. Consumer spending has fallen as people show less willingness to visit local restaurants and stores, especially in hard-hit areas, and several companies have warned of impending layoffs and closures due to slackened demand.