Weekly initial jobless claims hit 2.1 million

Lack of child care is complicating a return to work for many people.
Image: Jobless claims
Forty million people have filed for unemployment benefits since the coronavirus outbreak began in mid-March, according to data from the Labor Department.Nam Y. Huh / AP

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By Lucy Bayly

More than 2.1 million Americans filed for unemployment benefits for the first time last week, the 10th straight week that jobless claims have been in the millions as the coronavirus continues to cripple the economy.

The total number of people who have sought unemployment assistance now stands at more than 40 million since the crisis began in mid-March. Continuing claims, or the number of people who have filed for ongoing benefits, is now at 21 million, according to weekly data released Thursday by the Department of Labor.

While the weekly totals for jobless claims have continued to fall since hitting a peak of 6.8 million in late March, state labor departments have been overwhelmed by the application process.

That said, much of the backlog should have been eliminated by now, economists argue, after local governments completed updates of their websites and hired thousands of additional staff to help speed up processing.

The layoffs reflect an economic landscape that has been shattered and shuttered. Despite a gradual state-by-state reopening, many of the stores and restaurants that have returned to business must operate at one-quarter of their pre-coronavirus capacity, due to social distancing measures, requiring a smaller amount of staffing.

The cancellation of most summer camps, and an overall lack of child care, are also contributing to the elevated unemployment numbers, with some furloughed parents simply unable to return to work even when their position opens up again.

Additionally, higher-than-normal unemployment checks are keeping a portion of the labor market at home. The Federal Reserve noted in its monthly Beige Book report on the economy that business owners “cited challenges in bringing employees back to work, including workers’ health concerns, limited access to child care, and generous unemployment insurance benefits.”

Around 40 percent of all workers could earn more while unemployed than by returning to their previous job, according to a recent study by the University of Wisconsin-Madison.

Thursday's jobless data comes ahead of next Friday's closely watched monthly employment report. Government figures showed that more than 20 million people were out of work in April, kicking the unemployment rate up to 14.7 percent, the highest since the Great Depression.