People who lost their jobs wait in line to file for unemployment following an outbreak of the coronavirus disease, at an Arkansas Workforce Centre April 6, 2020. — Reuters pic
Stubbornly high joblessness could stifle the nascent signs of economic recovery that had been flagged by a record jump in retail sales in May and a sharp rebound in permits for future home construction. Federal Reserve Chair Jerome Powell told lawmakers this week that “significant uncertainty remains about the timing and strength of the recovery.
A separate report from the Philadelphia Fed yesterday showed labour market conditions remained depressed in June at factories in the mid-Atlantic region even as manufacturing activity in the region that covers eastern Pennsylvania, southern New Jersey and Delaware rebounded sharply. The PPP was credited for a drop in the number of people receiving benefits after an initial week of aid from a record 24.912 million in early May. But these so-called continued claims, which are reported with a one-week lag, also appear to have since stalled. The claims report showed continuing claims dropped 62,000 to 20.544 million the week ending June 6, suggesting companies were gradually recalling workers.
The government has expanded eligibility for unemployment benefits to include the self-employed and independent contractors who have been affected by the Covid-19 pandemic, including through lost employment, reduced hours and wages.