US layoffs remain elevated as 803,000 seek jobless aid – Long Island Business News


The number of Americans seeking unemployment benefits fell by 89,000 last week to a still-elevated 803,000, evidence that the job market remains under stress nine months after the coronavirus outbreak sent the U.S. economy into recession and caused millions of layoffs.

The latest figure, released Wednesday by the Labor Department, shows that many employers are still cutting jobs as the pandemic tightens business restrictions and leads many consumers to stay home. Before the virus struck, jobless claims typically numbered around 225,000 a week before shooting up to 6.9 million in early spring when the virus — and efforts to contain it — flattened the economy. The pace of layoffs has since declined but remains historically high in the face of the resurgence of COVID-19 cases.

“The fact that more than nine months into the crisis, initial claims are still running at such a high level is, in absolute terms, bad news,” Joshua Shapiro, chief U.S. economist at the economic consulting firm Maria Fiorini Ramirez Inc., wrote in a research note. “With the pandemic again worsening, it is likely that claims will remain quite elevated for some time.’’

The latest data on unemployment claims came on the same day that the government reported that consumer spending — the principal driver of the economy — fell in November for the first time since April. The 0.4% drop, coming in the midst of the crucial holiday shopping season, added to concerns that weak consumer spending will slow the economy in coming months. Economists suggested that the viral crisis, combined with diminished income and colder weather, likely led Americans to pull back in November.

Also on Wednesday, the government said that sales of new single-family homes sank 11% from October to November, though purchases remain up nearly 21% from a year ago. Boosted by rock-bottom mortgage rates, housing has proved resilient since the health crisis erupted last spring.

Another report Wednesday showed that orders to U.S. factories for high-cost manufactured goods rose a moderate 0.9% in November, with a key category that tracks business investment plans showing a gain. The rise in orders for durable goods, which are items that are expected to last at least three years, followed even stronger gains in recent months. The pace of orders has now nearly regained its pre-pandemic level.

In its report on applications for unemployment aid, the government said the total number of people who are receiving traditional state benefits fell to 5.3 million for the week that ended Dec. 12 from a week earlier. That figure had peaked in early May at nearly 23 million. The steady decline since then means that some unemployed Americans are finding work and no longer receiving aid. But it also indicates that many of the unemployed have used up their state benefits, which typically expire after six months.

Millions more jobless Americans are now collecting checks under two federal programs that were created in March to ease the economic pain inflicted by the pandemic. Those programs had been set to expire the day after Christmas. On Monday, Congress agreed to extend them as part of a $900 billion pandemic rescue package.

On Tuesday night, though, President Donald Trump suddenly raised doubts about that aid and other federal money by attacking Congress’ rescue package as inadequate and suggesting that he might not sign it into law.

The supplemental federal jobless benefit in Congress’ new measure has been set at $300 a week — only half the amount provided in March — and will expire in 11 weeks. A separate benefits program for jobless people who have exhausted their regular state aid and another benefits program for self-employed and gig workers will also be extended only until early spring, well before the economy will likely have fully recovered.

A tentative economic recovery from the springtime collapse has been faltering in the face of a resurgence of COVID-19 cases: An average of more than 200,000 confirmed cases a day, up from fewer than 35,000 in early September. Hiring in November slowed for a fifth straight month, with employers adding the fewest jobs since April. Nearly 10 million of the 22 million people who lost jobs when the pandemic hit in the spring are still unemployed.

According to the data firm Womply, closings are rising in some hard-hit businesses. For example, 42% of bars were closed as of Dec. 16, up from 33% at the start of November. Over the same period, closures rose from 25% to 29% at restaurants and from 27% to 35% at salons and other health and beauty shops.

The number of jobless people who are collecting aid from one of the two federal extended-benefit programs — the Pandemic Unemployment Assistance program, which offers coverage to gig workers and others who don’t qualify for traditional benefits — rose by nearly 27,000 to 9.3 million in the week that ended Dec. 5.

The number of people receiving aid under the second program — the Pandemic Emergency Unemployment Compensation program, which provides federal jobless benefits to people who have exhausted their state aid — fell by nearly 8,200 to 4.8 million.

All told, 20.4 million people are now receiving some type of unemployment benefits. (Figures for the two pandemic-related programs aren’t adjusted for seasonal variations.)

States and cities have been increasingly issuing mask mandates, limiting the size of gatherings, restricting or banning restaurant dining, closing gyms or reducing the hours and capacity of bars, stores and other businesses, all of which has slowed economic activity. With vaccines now beginning to be gradually distributed, though, optimism is rising about 2021.

Months from now, economists say, the widespread distribution and use of the vaccines could potentially unleash a robust economic rebound as the virus is quashed, businesses reopen, hiring picks up and consumers spend freely again.

Until then, the limited aid Congress has agreed to won’t likely be sufficient to stave off hardships for many households and small companies, especially if lawmakers balk at enacting further aid early next year. And a widening financial gap between the affluent and disadvantaged households will likely worsen.

“Recession risks are very high,″ said Mark Zandi, chief economist at Moody’s Analytics. “I do think the economy’s going to start losing some jobs here. Unemployment will probably go higher. The only thing that will save us from recession is that $900 billion fiscal rescue package.″





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Spiraling COVID-19 cases driving up U.S. layoffs; inflation still benign



FILE PHOTO: Hundreds of people line up outside the Kentucky Career Center, over two hours prior to its opening, to find assistance with their unemployment claims, in Frankfort, Kentucky, U.S. June 18, 2020. REUTERS/Bryan Woolston

December 10, 2020

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing first-time claims for jobless benefits jumped to a near three-month high last week as mounting new COVID-19 infections led to more business restrictions, further evidence that the pandemic and lack of additional fiscal stimulus were hurting the economy.

The weekly unemployment claims report from the Labor Department on Thursday, the most timely data on the economy’s health, followed in the wake of data last week showing job gains in November were the smallest since the recovery started in May. Labor market distress is eroding demand, keeping inflation tame.

“Mass unemployment continues to weigh on economic growth and demand,” said Chris Rupkey, chief economist at MUFG in New York. “If Congress continues to sit on its hands without voting on a new relief package, the plight of the nation’s unemployed is going to grow darker by the hour.”

Initial claims for state unemployment benefits surged 137,000 to seasonally adjusted 853,000 for the week ended Dec. 5, the highest since mid-September. The weekly increase was the largest since March, when the nation was battered by the first wave of coronavirus infections. Economists polled by Reuters had forecast 725,000 applications in the latest week.

Unadjusted claims vaulted 228,982 to 947,504 last week. Economists prefer the unadjusted number because of earlier difficulties adjusting the claims data for seasonal fluctuations due to the economic shock caused by the pandemic. Including a government-funded program for the self-employed, gig workers and others who do not qualify for the regular state unemployment programs, 1.4 million people filed claims last week.

Jobless claims hit a record 6.867 million in March. They are above their 665,000 peak during the 2007-09 Great Recession.

The United States is in the throes of a fresh wave of coronavirus infections, with more than 15 million confirmed cases. Daily COVID-19 deaths reached 3,253 on Wednesday, boosting the U.S. total since the start of the pandemic to 289,740, with a record 106,219 people hospitalized.

New strict stay-at-home orders went into effect in California this week, affecting about three-quarters of the nearly 40 million people in the nation’s most populous state.

Other states and local governments have also imposed restrictions on businesses, which economists expect to lead to layoffs during winter, especially without additional pandemic relief money from the government.

A deal on another package remains elusive amid proposals and counterproposals. More than $3 trillion in government pandemic relief has helped millions of unemployed Americans cover daily expenses and companies keep workers on payrolls. The fiscal stimulus has almost dried up.

U.S. stocks were mixed. The dollar fell against a basket of currencies. U.S. Treasury prices rose.

DECLINE IN PAYROLLS?

While some of last week’s jump in jobless claims likely reflected the usual noise after last month’s Thanksgiving holiday, the increase was broadly in line with other labor market data that have suggested the recovery was ebbing after a burst of hiring during summer.

With COVID-19 infections raging, economists expect a decline in employment over winter, noting it would take a while to distribute vaccines. Independent data showed consumers are hunkering down at home.

“We need to be braced for a window of perhaps three or four months where restrictions will weigh on economic activity,” said James Knightley, chief international economist at ING in New York. “We see a growing probability that employment declines in coming months and not just in those sectors focusing on consumer service who are most likely to experience direct restrictions.”

The claims report also showed that people receiving benefits after an initial week of aid increased 230,000 to 5.757 million in the week ended Nov. 28. That was the first rise since August. The so-called continuing claims had declined, in part as people exhausted their eligibility for benefits, limited to 26 weeks in most states.

At least 4.533 million people were on extended benefits during the week ended Nov. 21. These benefits, which are funded by the government, are set to expire on Dec. 26 without a new package. About 19 million people were receiving benefits under all programs during that period. Long-term unemployment is becoming acute. Only 12.4 million of the 22.2 million jobs lost in March and April have been recovered.

In another report on Thursday, the Labor Department said its consumer price index rose 0.2% in November after being unchanged in October. But the trend remained soft. In the 12 months through November, the CPI increased 1.2% after a similar gain in October. Excluding the volatile food and energy components, the CPI also climbed 0.2% after being flat in October.

Owners’ equivalent rent of primary residence, which is what a homeowner would pay to rent or receive from renting a home, was unchanged after rising 0.2%. Rent inflation has been tamed by forbearance agreements between tenants and landlords and a government moratorium on evictions.

In the 12 months through November, the so-called core CPI advanced 1.6%, matching October’s increase. Inflation is running below the Federal Reserve’s 2% target, a flexible average.

“Inflation will remain low in the near term … there are still huge swathes of excess capacity in many parts of the economy,” said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania. “With unemployment elevated, wage pressures are limited.”

(Reporting by Lucia Mutikani; Editing by Dan Burns, Andrea Ricci and Bernadette Baum)





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US job openings rise moderately; layoffs increase


WASHINGTON: US job openings increased modestly in October and layoffs rose, strengthening views that the labour recovery from the COVID-19 pandemic was slowing.

Job openings, a measure of labour demand, increased to 6.65 million on the last day of October from 6.49 million the prior month, the Labor Department said on Wednesday in its monthly Job Openings and Labor Turnover Survey, or JOLTS. Vacancies are below their 7 million level in February.

The job openings rate edged up to 4.5 per cent from 4.4 per cent in September. Layoffs increased 243,000 to 1.7 million. That included 91,000 layoffs in the federal government, largely due to the discharge of temporary workers hired for the 2020 Census.

The layoffs rate rose to 1.2 per cent from 1.0 per cent in September. Hiring dipped to 5.81 million from 5.89 million in September. That lowered the hiring rate to 4.1 per cent from 4.2 per cent in September.

The JOLTS report followed on the heels of news last Friday that the economy created 245,000 jobs in November, the smallest gain in non-farm payrolls since the jobs recovery started in May and the fifth straight monthly slowdown in employment growth. The economy has recouped only 12.4 million of the 22.2 million jobs lost in March and April.



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Fla. man claims he was fired in retaliation for sharing a letter about layoffs under Biden administration


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UPDATED 12:24 PM PT – Saturday, October 24, 2020

A Florida man has claimed he was fired after he revealed a letter from his employers that warned of potential lay-offs if Joe Biden wins the upcoming election.

Stan Smith said the letter warned: “if Biden and the Democrats win, Daniels Manufacturing Corporation in Florida could be forced to begin permanent layoffs in late 2020 or early 2021.”

President Trump and Democratic candidate Joe Biden. (Photo by JIM WATSON,SAUL LOEB/AFP via Getty Images)

The company’s president, George Daniels, reported it was his duty to notify employees of potential outcomes in the workplace following the election.

President of the ‘Job Creators Network‘ Elaine Parker also defended the letter and stated it was not about revenge over election results.

“Employers have the right to educate their employees about the negative impacts of policy,” claimed Parker. “We believe that they have the obligation to do so.”

Smith was allegedly fired for sharing the information with a media source as well as falsely accusing Daniels of voter intimidation. He plans to file a lawsuit over his termination.

MORE NEWS: Colo. Churches Win Lawsuit Against COVID-19 Restrictions





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Second wave of layoffs looms as COVID cases climb, straining hard-hit industries


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Those job losses would damage an engine of Canada’s recent job growth, as the accommodation and food services sector added 72,000 positions in September, StatsCan said. Another vulnerable sector, information, culture and recreation, added 56,000 jobs. There was also an increase of 68,000 educational jobs as the school year began, which is a pop that may not be repeated in October.

September’s growth put Canada’s workforce within 720,000 jobs of where it was in pre-pandemic February. However, in the months to come, the Bank of Canada and other forecasters anticipate that additional economic gains will be harder fought, coming at a far less rapid rate than the feel-good summer days of declining COVID-19 cases and soaring jobs numbers.

“It will be a long, slow climb to get everybody back to pre-pandemic working hours, particularly in the sectors that are most affected,” Bank of Canada Governor Tiff Macklem warned in a speech on Oct. 8.

It will be a long, slow climb to get everybody back to pre-pandemic working hours, particularly in the sectors that are most affected

Bank of Canada Governor Tiff Macklem

For some, the climb could be slower and longer, as the faster-than-expected rebound in overall employment has masked an uneven recovery overall.

Statistics Canada said three-quarters of the gap in employment from pre-February levels is concentrated in four industries: accommodation and restaurants; retail; construction; and transportation and warehousing. Prospects for those sectors are up in the air, suggesting the pace of employment could slow, and may even reverse course, depending on the severity of the second wave.



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Unemployment – The reasons behind America’s new wave of lay-offs | United States




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As the pandemic forced layoffs, CEOs gave up little


Companies in this group include The Walt Disney Co, Delta Air Lines, United Airlines and Marriott International. All of those businesses have laid off or furloughed employees or pressed workers to take pay cuts.

This compensation analysis offers another example of how the coronavirus pandemic has walloped the working and middle classes while mostly sparing the people at the very top of the economic hierarchy.

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“These salary cuts were more window dressing than anything else,” said Liz Shuler, secretary-treasurer of the AFL-CIO.

The labour federation Wednesday released a report showing that companies in the S&P 500 stock index last year paid chief executives on average 264 times as much as median employees, down from 287 times in 2018.

Of course, this analysis is incomplete because the year is not over. In the coming months, corporate boards could decide to significantly reduce the bonuses and stock options they hand out to top executives for 2020. That would represent a big break from recent years when boards, which are primarily made up of corporate executives and investors, approved ever higher pay packages.

A few chief executives have already taken a sizeable hit. The survey showed that Glenn Kelman, chief executive of Redfin, a Seattle-based real estate brokerage, took a pay cut that was equivalent to the $US284,000 ($395,000) he got in 2019.

“The reason we did it is because we had to furlough or lay off more than a thousand people,” Kelman said when asked what motivated the decision to withhold his salary. “It’s not just about the pay cut; it’s about the general sense that capitalism is not working for everyone.”

CGLytics surveyed the companies in the Russell 3000 index, which comprises most of the publicly traded businesses in the United States, and found that 419 companies had disclosed details of salary cuts. Only about 10 per cent of those companies cut salaries by more than 25 per cent of the executive’s 2019 total “realised” compensation, a figure that CGLytics came up with by adding up all the money and stock each boss received last year. The firm values the stock at the price at which trading ended December 31.

The price of many stocks fell sharply this spring when the pandemic took hold. But stocks can recover over time, and many have soared since March.

As it became clear that the pandemic was going to devastate the economy and their businesses, many boards and chief executives appeared to sense a need to tell workers and investors that they were sharing in the pain.

United Airlines said the executives’ salary cuts were a recognition of the effects of the pandemic and “to lead by example.” United, which has been hit hard by a plunge in demand for air travel, is expected to start furloughing up to 36,000 workers October 1. Oscar Munoz, who in May became United’s executive chairman after serving as chief executive, did not get salary from March 10 through June 30, which amounted to a $US610,000 pay cut on the $US2 million salary he is being paid this year. But the reduction was a little less than 3 per cent of the $US22.2 million that Munoz took home in 2019.

United’s new chief executive, J. Scott Kirby, will give up around $US790,000 of salary this year. That is equivalent to 9 per cent of the $US8.7 million that CGLytics estimates he received last year. United said that it was “extremely unlikely” that it would make 2020 bonus payments, which it planned to set at 250 per cent of salary, to its top executives.

Delta’s chief executive, Ed Bastian, took a salary cut of around $US714,000, or 5.35 per cent of the total compensation he received in 2019, according to CGLytics. A Delta representative said the decline in Delta’s stock price and difficulties ahead for the airline would weigh heavily on the value of Bastian’s pay. The spokesman, Trebor Banstetter, said the value of Bastian’s total compensation this year was likely to be down 58 per cent from “pre-pandemic projections,” but he did not provide details of how the company arrived at that figure.

Delta is asking its pilots to take pay cuts in order to keep their jobs

Disney awarded Robert A. Iger, its former chief executive who stepped down in February, large compensation packages over the nearly 15 years that he led the company. Iger, who is now executive chairman, gave up his salary from the end of March through the end of the year. The $US2.25 million in foregone pay is equivalent to 3.3 per cent of Iger’s total realised compensation in 2019, according to CGLytics. Disney furloughed tens of thousands of workers in March.

The hotel industry has also been hit hard by the pandemic, and companies like Marriott International have been furloughing and laying off workers. The company’s chief executive, Arne M. Sorenson, took a salary cut that was equivalent to less than 2 per cent of the $US66 million in total compensation that CGLytics says he was paid in 2019. Connie Kim, a Marriott spokeswoman, said nearly $US50 million of the compensation for last year was related to stock appreciation rights granted nine to 10 years earlier.

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Some companies merely deferred salary payments for senior executives, rather than make outright cuts. General Motors deferred 30 per cent of the salary of its chief executive, Mary T. Barra, and other top leaders, and 20 per cent of other white-collar employees. The deferrals, which began April 1, were going to last for as long as six months, but Tuesday, General Motors told employees that it was ending the 20 per cent deferrals on August 1. Barra and the other senior executives will continue to defer 10 per cent of their salaries. She made $US30 million in total realised compensation last year, according to CGLytics.

When asked why the deferrals were ending sooner than expected, James R. Cain, a company spokesman, said, “The business demanded that we conserve cash, and it is recovering faster than we expected.”

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Persistently high layoffs suggest a slow U.S. economic rebound


Three months after the viral outbreak shut down businesses across the country, U.S. employers are still shedding jobs at a heavy rate, a trend that points to a slow and prolonged recovery from the recession.

The number of laid-off workers seeking unemployment benefits barely fell last week to 1.5 million, the government said Thursday. That was down from a peak of nearly 7 million in March, and it marked an 11th straight weekly drop. But the number is still more than twice the record high that existed before the pandemic. And the total number of people receiving jobless aid remains a lofty 20.5 million.

The figures surprised and disappointed analysts who had expected far fewer people to seek unemployment aid as states increasingly reopen their economies and businesses recall some laid-off people back to work. The data also raised concerns that some recent layoffs may reflect permanent losses as companies restructure their businesses, rather than temporary cuts in response to government-ordered closures.

The report is “telling us that the scars from the job losses in the recession will be longer-lasting than we expected,” said Gregory Daco, chief U.S. economist at Oxford Economics.

At the same time, Thursday’s figures may have raised as many questions about the state of the job market as they answered. Jobless claims generally tracks the pace of layoffs. But they provide little information about how much hiring is occurring that would offset those losses. In May, for example, employers added 2.5 million jobs — an increase that caught analysts off-guard because the number of applications for unemployment aid was still so high.

Some likely factors help explain why applications for jobless benefits remain so high even as businesses increasingly reopen and rehire some laid-off workers. For one thing, many businesses that deal face-to-face with customers — from restaurants and movie theaters to gyms and casinos — remain strictly limited to less-than-full capacity. Some of those establishments are still cutting jobs as a result.

Casinos in Louisiana, for example, can open at half-capacity. But Boyd Gaming Corp., which operates five casinos in the state, has informed 1,500 of its workers that with financial losses mounting, they could be laid off by early July.

And in some especially hard-hit sectors, like the hotel and travel industries, corporations are now slashing white-collar workers because their business remains far below pre-pandemic levels. This week, Hilton Hotels said it would cut 22% of its corporate global workforce — about 2,100 jobs.

Although consumer spending, the primary driver of the U.S. economy, is recovering from its low in mid-April, it remains far below its pre-pandemic level, according to data compiled by Opportunity Insights. That trend may be forcing changes at some companies that managed to withstand the initial shutdowns. AT&T, for instance, said this week that it plans to cut 3,400 technical and clerical workers over the next few weeks. It also plans to permanently close 250 of its Mobility and Cricket Wireless stores.

“We’re starting to see more job losses among higher-skilled positions that are harder to recall,” said Brad Hershbein, a senior economist at the Upjohn Institute.

And some states may still be clearing backlogs of applications from weeks or months ago.

Corinne Cook, who lives in Kissimmee, near Orlando, just received her first unemployment payment last week, after being laid-off from her job in mid-April. Cook, 28, moved to the area in September for an 18-month contract position as a 3-D modeler for Walt Disney, a job involving sculpting character prototypes that were printed on 3-D printers. She lost her job when the parks closed down.

She’s receiving the minimum state unemployment benefit from Florida, $125 a week, because the state has no record of her prior earnings in New Jersey, even though she said she has uploaded, mailed and faxed her documents from her job there. If her previous earnings were properly credited, her state benefits would more than double. She is grateful, though, for the extra $600 in federal unemployment benefits, which have allowed her to pay some bills.

Dealing with the state’s bureaucracy “was very stressful,” she said.

Daco of Oxford Economics said he still expects the June jobs report, to be released in early July, to show another hiring gain. But these figures will be particularly hard to forecast. Tens of millions of people may be flowing in and out of work each month, he noted, making it much more difficult to forecast where the job market is headed.

The jobs report for May had suggested that the damage might have bottomed out. The unemployment rate declined from 14.7% to a still-high 13.3%.

Even so, nearly 21 million people are officially classified as unemployed. And including people the government said had been erroneously categorized as employed in May and those who lost jobs but didn’t look for new ones, 32.5 million people are out of work, economists estimate.

Thursday’s report showed that an additional 760,000 people applied for jobless benefits last week under a new program for self-employed and gig workers that made them eligible for aid for the first time. These figures aren’t adjusted for seasonal variations, so the government doesn’t include them in the official count.

Other recent data have been more encouraging and suggest that the lifting of shutdown orders has sparked some pent-up demand from consumers. Most economic gauges remain far below their pre-pandemic levels, though, and some analysts question whether the recent gains can be sustained, especially if the virus were to surge back.

Last month, retail and restaurant sales jumped nearly 18%, the government said Tuesday, retracing some of the record plunges of the previous two months. Still, retail purchases remain a sizable 6% below their year-ago levels.

One key reason why consumer spending has somewhat rebounded is that government aid programs, from one-time $1,200 stimulus checks to $600-a-week in supplemental federal unemployment aid, have helped offset the loss of income for laid-off Americans. Yet nearly all the stimulus checks have been issued. And the supplemental federal jobless aid is set to expire July 31.

“Recently, some indicators have pointed to a stabilization, and in some areas a modest rebound, in economic activity,” Federal Reserve Chairman Jerome Powell said Tuesday in testimony to a Senate committee. Yet “until the public is confident that the disease is contained, a full recovery is unlikely.”

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