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Pandemic job losses level off, but at very high levels

Here’s where we stand on the economy, the prospects for improvements, and additional aid for the unemployed.

Jobless claims have leveled off after a devastating surge in March and April.Paul Sakuma/Associated Press

The good news about the job market is that it doesn’t seem to be getting worse.

After a gut-roiling surge in March and April to levels not seen since the 1930s, layoffs declined sharply and have leveled off over the past two months. New claims for unemployment pay in Massachusetts have averaged about 37,000 a week since the start of June, down from a peak of more than 180,000, according to data released Thursday by the state Department of Unemployment Assistance. In the week ended Saturday, filings were just under 30,000, a small nudge up up from the prior week.


Nationally, the trend is the same: Claims dipped to 1.61 million from a revised 1.63 million a week earlier, the US Bureau of Labor Statistics said Thursday, while the average since June has been about 2 million.

(Both the Massachusetts and US figures combine filings under standard state programs as well as the federal pandemic emergency program begun in April for gig workers, independent contractors, and others who were previously ineligible for jobless benefits.)

But overall, unemployment remains staggeringly high. Some 27 million Americans received jobless pay at the start of the month, which is equal to 17 percent of the labor force before the coronavirus pandemic.

Meanwhile, the extra $600 a week everyone on unemployment was getting from the federal government expired at the end of July, and a stop-gap measure to replace that bonus with $300 a week is taking time to implement.

Where does the job market go from here? Will the government come through with more money to bulk up unemployment pay? Here are some important things to watch as the summer winds down.

COVID-19 cases

The economy’s future will be driven largely by the course of the pandemic.

The shutdown of all but essential businesses triggered the biggest drop in gross domestic product on record. The output of goods and services contracted by 31.7 percent during the April-June quarter, the Commerce Department reported Thursday, slightly less than its original estimate in July. Some 22 million jobs disappeared in March and April.


Hiring recovered as states began to reopen, with 13 million jobs filled in the past three months, but the pace slowed as COVID-19 cases surged in many part of the country.

Consumer spending, which powers two-thirds of the economy, will not fully recover until people feel safe getting on a plane or train, going to movies and sporting events, and returning in large numbers to their offices. And until that time, unemployment will remain at elevated levels.

Long-term unemployment rates

While nationally, weekly jobless claims have dropped dramatically from their peak of 6.6 million in April, they continue at a rate far higher than the previous record of 695,000 in 1982. And Thursday’s report from BLS showed a growing number of people struggling to find work.

The number of claims for extended federal coverage, which provides up to an additional 13 weeks of benefits, climbed by 119,000 to 1.4 million in the week ended Aug. 8, the latest data available. In Massachusetts, more than 100,000 people have requested the federal extension.

Enhanced jobless benefits

As part of the CARES Act passed in March, Congress authorized $600 a week in enhanced unemployment compensation. The money, which played a vital role in keeping families and the economy afloat, stopped flowing at the end of July as lawmakers couldn’t agree on an extension.


President Trump subsequently steered up to $44 billion from the Federal Emergency Management Agency for a $300-a-week supplement. While better than nothing, the FEMA allocation is a short-term fix for what is expected to be a long stretch of high unemployment. The Federal Reserve forecasts that 2020 will end with the jobless rate at 9.3 percent, dropping to 6.5 percent — almost double the level prior to the pandemic — by the end of the following year.

Massachusetts benefits

Massachusetts is one of 34 states that has been approved by FEMA to pay the extra $300 a week. It was allocated almost $645 million to cover the weeks ended Aug. 1, Aug. 8, and Aug. 15, according to a summary of the award memo from FEMA.

The state hasn’t said when it will begin sending out the bonus, which is being funded through FEMA’s disaster relief fund. Delivery hinges on making upgrades to its computer systems.

The Baker administration also hasn’t said how long it will be able to pay the extra cash. It will have to apply weekly to FEMA. Based on recently unemployment levels, the $44 billion the agency is authorized to distribute would last about 5 weeks.

The FEMA bonus is supposed to go to people who receive at least $100 a week in state benefits. The state couldn’t say what percentage of recipients meet that threshold.