JUST IN: Around 1.5 million people filed for unemployment for the first time last week.
“For an economy that is reopening, that is a huge number,” Steven Blitz, chief U.S. economist at TS Lombard, told Reuters. “The economy is losing workers and employment beyond the initial impact tied to businesses that shut down."
Federal Reserve Chairman Jerome Powell reiterated that message this week in testimony to lawmakers, saying,"The longer the downturn lasts, the greater the potential for longer-term damage from permanent job loss and business closures. Long periods of unemployment can erode workers' skills and hurt their future job prospects."
Specifically, Thursday's data showed that continuing claims, or the number of people applying for ongoing benefits is now around 20.5 million. With the economy reopening, that number should have tapered off by now, labor market analysts say, since millions of people who were furloughed or laid off are theoretically returning to their job.
However, concerns are mounting that many of those temporary layoffs will become permanent once companies and small businesses realize they cannot meet their margins amid social distancing guidelines and the recessionary environment. The Fed Chair credited federal loans and grants to businesses, as well as a massive round of stimulus checks and unemployment benefits to individuals, for"supporting household incomes and spending" during the crisis and for helping to boost employment gains.
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