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Weekly jobless claims rise for the first time in months; 1.4 million Americans sought benefits

A "Now Hiring" sign hangs on the door to the Urban Outfitters store at Quincy Market in Boston.
A "Now Hiring" sign hangs on the door to the Urban Outfitters store at Quincy Market in Boston.REUTERS

WASHINGTON (AP) — The number of laid-off Americans seeking unemployment benefits rose last week for the first time since the pandemic struck in March, evidence of the deepening economic pain the outbreak is causing to the economy.

The rise in weekly jobless claims to 1.4 million underscores the outsize role the unemployment insurance system is playing among the nation’s safety net programs — just when a $600 weekly federal aid payment for the jobless is set to expire at the end of this week.

All told, the Labor Department said Thursday that roughly 32 million people are receiving unemployment benefits, though that figure could include double-counting by some states. Some economists say the figure is likely closer to 25 million.

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Last week’s pace of unemployment applications — the 18th straight week it’s topped 1 million — was up from 1.3 million the previous week. Before the pandemic, the number of weekly applications had never exceeded 700,000.

An additional 975,000 applied for jobless aid under a separate federal program, called Pandemic Unemployment Assistance, that made self-employed and gig workers eligible for the first time. That figure isn’t adjusted for seasonal trends, so it’s reported separately.

In Massachusetts, which like all states reports initial claims on an unadjusted basis, new filings fell to 18,300 from 24,100 a week earlier. There were an additional 12,400 claims under the federal pandemic program, down about 800 from the previous week.

In all, more than 513,000 people received Massachusetts jobless benefits in the week ended July 11, a drop from 537,000 the prior week. Another 437,000 received pandemic assistance in the week ended July 4, up from 428,500 a week earlier. (These data are reported on a one-week and two-week delay, respectively.)

The resurgence of confirmed viral cases across the country has forced some businesses to close a second time or to impose tighter restrictions on customers in response to state mandates. The resulting pullback in business activity has hindered job growth and likely forced additional layoffs.

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The federal government’s $600 weekly benefit for laid-off workers — which is in addition to whatever jobless aid a state provides — is the last major source of economic help from the $2 trillion relief package that Congress approved in March. A small business lending program and one-time $1,200 payment have largely run their course.

Members of Congress are negotiating another aid package that might extend the $600 benefit, though likely at a lower level. Because of the $600 weekly federal benefit, roughly two-thirds of the unemployed are receiving more in aid than they earned at their former jobs, research has shown — a finding that's led Republicans to argue that it is discouraging people from returning to work.

Yet the additional money has also been a key source of support for people who lost jobs that no longer exist or who fear being infected by the virus if they return to work.

The federal jobless aid has also helped buttress the overall economy. Unemployment aid accounted for 6% of all U.S. income in May, a greater share than even Social Security. Economists say it’s one reason why retail spending rebounded as quickly as it did in May and June, helping fuel a modest economic rebound.

Larry Edelman of the Globe staff contributed to this report.


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