The Department of Labor data will likely fuel the urgency in Washington to quickly extend enhanced federal pandemic unemployment benefits.
Unemployment claims rose to 1.4 million last week, up about 100,000 from the week before, the Labor Department reported, ending 15 weeks of consecutive declines in new applications.
An additional 975,000 people applied for aid under the temporary federal pandemic unemployment assistance program, created to provide jobless aid to workers ineligible for traditional unemployment benefits, such as gig workers.
The increase in the number of workers seeking new aid comes as several states like California, Texas and Florida have closed some businesses down again, and coronavirus cases have shot up across the United States.
More than 30 million Americans are currently on unemployment and several states have delayed reopening plans in recent weeks — shrinking the already small pool of available work.
“The combined effect of rising layoffs, expiring unemployment benefits and escalating coronavirus outbreaks sets up a perfect economic storm that could easily derail the weakening economy’s fledgling recovery,” said Glassdoor Senior Economist Daniel Zhao in reaction to the report.
The data will fuel the urgency in Washington to extend the enhanced federal pandemic unemployment benefits set to expire this weekend, as lawmakers debate another economic rescue package.
Republicans were originally opposed to continuing the extra $600-a-week jobless benefit, but are now on board with offering more federal unemployment aid — at a lower amount.
However, it’s already too late to prevent a lapse in benefits for millions of workers. Some states with antiquated systems won’t be able to update their computers in time to prevent a gap.
The rise in jobless claims confirms economists’ fears that despite declines in the unemployment rate in May and June, the economy is still scrambling to recover from the pandemic-induced shock.
The nonpartisan Congressional Budget Office forecast earlier this month that unemployment will continue to climb, peaking at 14 percent in the third quarter of this year.
About the Author: Rebecca Rainey is an employment and immigration reporter with POLITICO Pro and the author of the Morning Shift newsletter.