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In the most recent week, 412,000 new claims for unemployment benefits were filed, the U.S. labor department reported, breaking a six-week streak of steady declines and missing the median estimate of 370,000 among economists surveyed by Bloomberg.
Continuing claims rose to 3.52 million, also failing to meet economists’ estimate, which had called for 3.43 million ongoing claims.
Although new claims for jobless payments have been trending down, continuing claims have shown no such tendency; seven million more Americans are jobless now than before the 2020 crisis.
Fear of catching the COVID virus, generous federal unemployment benefits, a lack of affordable child care, and a mismatch between workers and needed skills are keeping workers out of the labor force, U.S. Federal Reserve chair Jerome Powell said in a 16 June press conference quoted by Business Insider.
Those factors are likely to diminish through the summer, Powell predicted.
“I would expect that we would see strong job creation building up over the summer and going into the fall,” he said.
TRENDPOST: Powell is obligated to sound optimistic; we are obligated to be realistic.
Airlines say that business travel will not resume in a meaningful way until late this year; many corporations have decided that Zoom is as effective as junketing executives spending company money on hotels and plane tickets. That means that hotels, as well as nearby restaurants, night spots, and other dependent businesses, can permanently dispense with a portion of their workforce.
Restaurants are having trouble finding workers, in part because “people working in hospitality went home and…reassessed their lives,” Berlin restaurateur Emily Harmon said in our 1 June, 2021 story “Europe’s Hospitality Industry Starved for Workers,” and decided they no longer wanted to work long hours for poor pay.
Retailers have shuttered stores by the thousands as the economic shutdown persuaded shoppers of the convenience of buying everything from groceries to lawn mowers online.
The economic shutdown has made permanent changes to the economy that have forever reduced the number of workers needed in service jobs. These workers typically lack the skills to upgrade to higher-paying work. As a result, unemployment among these millions of low-skill workers will become chronic.