US layoffs climb to 41 million despite businesses reopening

WASHINGTON, DC, United States (AP) — An estimated 2.1 million Americans applied for unemployment benefits last week despite the gradual reopening of businesses around the country, bringing the running total since the novel coronavirus shutdowns took hold in mid-March to about 41 million, the Government said yesterday.

In a glimmer of hope, the overall number of people currently drawing jobless benefits in the US fell for the first time since the crisis began, from 25 million to 21 million, suggesting some companies are starting to rehire.

Still, the Labour Department report underscored the continuing economic damage from the viral outbreak that on Wednesday hit a confirmed death toll in the US of 100,000, more than the number of Americans killed in the Vietnam and Korean wars combined.

President Donald Trump weighed in on the figure a day later via Twitter, calling it “a very sad milestone” and extending condolence to the victims' loved ones.

The US unemployment rate was 14.7 per cent in April, a level not seen since the Great Depression, and many economists expect it will be near 20 per cent in May.

First-time applications for unemployment have fallen for eight straight weeks, as states gradually let stores, restaurants, salons, gyms, and other businesses reopen and the auto industry starts up its factories again.

But the number of Americans filing for unemployment is still extraordinarily high by historical standards, and that suggests businesses are failing or permanently downsizing, not just laying off people temporarily until the crisis can pass, economists warn.

“That is the kind of economic destruction you cannot quickly put back in the bottle,” said Adam Ozimek, chief economist at Upwork.

The figures come amid an intensifying debate in Congress over whether to extend $600 in extra weekly federal unemployment benefits, provided under rescue legislation passed in March, but set to expire July 31.

Democrats have proposed extending the payments, while Republicans have argued that the extra money could discourage laid-off workers from returning to jobs that pay less than they are getting on unemployment.

Kelly Kelso, a 30-year-old roadie from Nashville for the rock group Foreigner, got her first unemployment check last week after more than eight weeks of waiting. She said she is still receiving far less in benefits than the $1,250 per week or more that she made on tour.

Though she is reluctant to leave the music industry, she said, “I have a cosmetology licence. If all else fails, I could go back to doing hair.”

US layoffs have hit some parts of the country with particular force. Nevada's unemployment rate in April reached 28.2 per cent, the highest in the nation. Michigan's was next at 22.7 per cent, followed by Hawaii at 22.3 per cent.

Economists say many of the jobs lost are never coming back, and double-digit unemployment could persist through 2021.

Airlines and aircraft manufacturers are struggling after air travel plummeted early in the outbreak. Boeing is cutting more than 12,000 US jobs through layoffs and buyouts, many expected to be in the Seattle area. European budget airline, Easyjet, said it will cut up to a third of its 15,000 employees.

There was other grim economic news in Europe, where countries like France have robust safety net programmes that are underwriting the wages of millions of workers, and keeping them on the payroll instead of adding them to the ranks of the unemployed.