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1.2 Million Americans File For Unemployment—Roughly 55 Million Filed Since March

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The United States Department of Labor reported Thursday that nearly 1.2 million Americans filed for unemployment benefits for the week ending August 1. This number—1,186,000 people—was lower than what economists had forecasted. Additionally, 655,707 Americans filed for claims under the Pandemic Unemployment Assistance program. This policy encompasses freelancers, part-time workers and other types of workers who don’t fit neatly within the traditional state requirements, but are eligible under the federal program. 

Last week’s claims represent 20 consecutive weeks of over 1 million people filing for benefits.  This has broken all previous records and shows an alarmingly high amount of people—about 30 million—collecting unemployment funds. Since the start of the Covid-19 pandemic, roughly 55 million Americans have filed for unemployment. This staggering number eclipses the 37 million claimants during the financial crisis. There’s a palpable fear that many of the jobs lost won’t be temporary, but rather permanent losses. 

It's almost impossible to comprehend that back in March, it was reported, “The Labor Department [announced] that the U.S. economy added 273,000 new jobs. The unemployment rate, at 3.5%, is one of the lowest in over 50 years.”

While the stock market is skyrocketing higher, last month, the U.S. saw a number of high-profile companies file for bankruptcy protection, such as Lord & Taylor, the parent company of Ann Taylor, Loft, Lane Bryant and Catherines stores and Tailored Brands, which owns Men's Wearhouse and Jos. A. Bank.

Well-known corporations have laid off—and continue to lay off—large numbers of employees.  NBCUniversal announced an approximate 10% layoff. With travel at a near standstill, Booking.com is downsizing 25% of its workforce, representing about 4,000 people. An array of other companies are also laying off—from Nike to LinkedIn to major airlines. This indicates the widespread nature of layoffs, as they’re not just clustered in a couple of market sectors.

 There’s a palpable fear for many American families. The enhanced $600 weekly federal unemployment payments has ceased at the end of July. The moratoriums to prohibit evictions will be gone too. In a few months, the restrictions attendant with the Paycheck Protection Program money offered to companies to retain workers will end Sept. 30. Given the current economic climate, it's reasonable to conclude that a large number of people will be let go.

There are ripple effects to be seen. With less people working, they’re saving and not spending. The lack of money flow into the economy translates into less revenue for businesses, which will cause them to cut jobs to stay afloat.

 Another interesting societal change affected by the massive job losses is that young adults are moving back home. With high rents, loss of jobs, colleges closed down, almost 3 million young adults moved back home with their parents. According to Zillow, the online real estate advertising company, 32 million adults live with a parent or grandparent, as of April.

The longer this continues, the more lives will be adversely impacted. Unless Congress can put aside its political differences, there’s no reason things will change for the better. The U.S. will continue seeing a steady increase in unemployment, bankruptcies and lives interrupted and upended.

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