1.3 million people filed for first-time unemployment last week

Three months after the pandemic first hit, the nation is still seeing more than a million people a week filing for unemployment benefits for the first time.

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By Lucy Bayly

First-time applications for unemployment benefits topped 1.3 million last week, marking a continued pain point in the nation's economic recovery after 17 straight weeks of job losses in the millions.

The data, released Thursday by the Department of Labor, comes amid a spike in coronavirus cases in 40 states, complicating a broader nationwide reopening of businesses.

Meanwhile, lawmakers in Washington remain at loggerheads over extending the supplemental $600 in pandemic unemployment assistance that has been a lifeline to families affected by coronavirus-induced layoffs. The benefit is set to expire at the end of the month.

Some of those families broadsided by the collapse in the labor market are now facing eviction, as states lift temporary moratoriums put in place to protect people who fell behind on rent because of the coronavirus.

While some regions have seen upticks in hiring as businesses reopen, there are still signs of ongoing distress in the workforce. American Airlines this week warned that it could lay off as much as 20 percent of its workforce as travel demand remains at historic lows. Retailers including JCPenney and PVH, which operates stores such as Calvin Klein, also announced layoffs this week.

Nearly half of small-business owners worry they cannot afford to carry on with normal operations once state stay-at-home orders are lifted, according to a recent LendingTree survey. Around 25,000 retail stores will close this year — double the number that shuttered in 2019, The Wall Street Journal reported on Thursday.

First-time unemployment applications peaked at a staggering 6.9 million at the end of March, before abating to levels that, while much lower, are nonetheless almost 10 times the usual claims. Weeks of elevated numbers are partly due to the fact that state unemployment offices continue to work through a backlog of claims, some dating back as far as March.

Economists say the pain is likely not over yet. As government aid runs out for businesses who received a loan through the Paycheck Protection Program, more layoffs are expected. And any rise in coronavirus cases will lead to further contraction of the economy as consumer spending shrivels up amid continued — or repeat — shutdowns.