Layoffs grow as companies gauge the course of the pandemic — and prospects for federal aid.
American employers continue to cut jobs, signaling new anxiety about the course of the coronavirus pandemic and uncertainty about further legislative relief.
Furloughs of more than 30,000 workers by United Airlines and American Airlines began Thursday after Congress was unable to come up with a fresh aid package for the industry. The Walt Disney Company, whose theme parks in Florida and California have been hard hit by a shortage of visitors, said Tuesday that it would lay off 28,000 workers.
Allstate announced Wednesday that it would lay off approximately 3,800 employees, primarily in claims, sales, service and support functions, as part of a plan to reduce costs. The cuts constitute about 8 percent of the roughly 46,000 employees Allstate had at the end of 2019.
Many economists say another effort like the CARES Act, passed in March, could ease the employment outlook, but an agreement has been elusive for months. Last-ditch negotiations between the White House and congressional Democrats were continuing Thursday.
“It’s unclear how many companies can sustain themselves and retain payrolls that support incomes,” said Rubeela Farooqi, chief U.S. economist for High Frequency Economics. “A solid rebound in job growth is now looking more muted.”
The Labor Department reported Thursday that 787,000 Americans filed for state unemployment benefits for the first time last week. It was a decline from the previous week’s total of 827,000, but the figures — unadjusted for seasonal variations — are roughly four times the weekly tally of claims from before the pandemic.
“Clearly there has been a moderation in the rate of improvement from the early stages,” said Michelle Meyer, head of U.S. economics at Bank of America. “As we get further away from the initial shock, we have less of a natural catch-up, and we face more residual damage.”
With seasonal adjustments, last week’s figure was 837,000.
Applications for Pandemic Unemployment Assistance, an emergency federal program aimed at independent contractors, gig workers and part-time employees, totaled 650,000.
With the end of a $600 federal weekly supplement to unemployment benefits in July, consumers have less to spend at businesses struggling to stay open, like restaurants, bars and retail stores.
The Commerce Department said Thursday that personal income declined 2.7 percent in August, reflecting the cessation of the $600 payments.
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