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U.S. layoffs remain elevated as 840,000 seek jobless aid

WASHINGTON (AP) — The number of Americans seeking unemployment benefits fell slightly last week to a still-high 840,000, evidence that job cuts remain elevated seven months into the pandemic recession.

The latest sign of a flagging recovery comes two days after President Donald Trump cut off talks over a new rescue aid package that economists say is urgently needed for millions of unemployed Americans and struggling businesses. A failure to enact another round of government aid would crimp household income and spending, and some economists say it would raise the risk of a double-dip recession.

WATCH: Americans need a ‘robust’ federal aid package, says Fed’s Kashkari

Thursday’s report from the Labor Department said the number of people who are continuing to receive unemployment benefits dropped 1 million to 11 million. The decline suggests that many of the unemployed are being recalled to their old jobs. But it also reflects the fact that some have used up the 26 weeks of their regular state benefits and have transitioned to extended benefit programs that last an additional three months.

The weekly count of Americans applying for unemployment benefits has become less reliable as some states have increased their efforts to root out fraudulent claims and process earlier applications that have piled up.

California, for example, which accounts for more than one-quarter of the nation’s unemployment applications, last week simply provided the same figure it had supplied two weeks ago. That was because the state has stopped accepting jobless claims online for two weeks so it can implement anti-fraud technology and catch up with a backlog of 600,000 applications.

Across the country, hiring has slowed just as federal rescue aid has run out, hampering an economy still climbing out of the deep hole created by the pandemic. Employers added just 661,000 jobs in September, less than half of August’s gain and the third straight monthly decline.

Just over half the 22 million jobs lost to the coronavirus have been recovered, leaving the economy with 10.7 million fewer jobs than in February — a figure that exceeds all the job losses from the 2008-2009 Great Recession.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story is below:

The government will provide its latest picture Thursday of the pace of layoffs in the United States, which have remained high since the viral pandemic erupted in March even while federal aid for the jobless has lapsed.

The still-elevated number of people seeking unemployment benefits each week reflects an economy that has recovered only slightly more than half the 22 million jobs that were lost to the pandemic. Millions of Americans are facing unemployment with vastly diminished aid since the expiration of a $600-a-week federal benefit this summer.

The latest report on jobless claims comes just after President Donald Trump cut off talks in Washington over a new federal rescue aid package that economists say is urgently needed for unemployed workers and struggling businesses.

At the same time, some newly laid-off people are facing delays in receiving unemployment benefits as some state agencies intensify efforts to combat fraudulent applications and clear out backlogged claims.

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