Another 1.5 million Americans filed for unemployment benefits last week, about one-third fewer than the week prior. The number suggests that the rate of job loss in America has stabilized, even though businesses continue to hemorrhage employees at unprecedented levels.
The Department of Labor’s unemployment report for the week ending June 13 showed 20.5 million Americans receiving unemployment benefits, down from 25 million in early May.
Before Covid, the peak for weekly unemployment filings was 695,000 in 1982, while the record number receiving benefits was 6.6 million in 2009, according to Labor Department figures that have been kept since 1967.
“You’re going to see elevated levels of layoffs because some businesses will permanently close,” Berenberg Capital Markets economist Roiana Reid told the Wall Street Journal. “But hiring and rehiring will outweigh that this summer, especially as you see big cities, such as New York, reopen.”
One of the largest employers to cut jobs was Hilton Worldwide, which said this week it will eliminate 2,100 of approximately 9,600 corporate positions across the globe, as well as extend furloughs, pay cuts, and hours reductions for an additional 90 days. Marriott International and Hyatt Hotels have also laid off or furloughed thousands of employees, according to Reuters.
In response to the Covid-19 crisis, Hilton has said it will raise its standards for cleanliness and disinfection. Shares of Hilton were up 2.4% late Thursday afternoon.
After losing 8.2 million jobs during March and April, the leisure and hospitality industry rehired 1.2 million people in May, with restaurants and bars adding 1.4 million jobs. Hotels continue to be a sore spot, with employment in the accommodation sector falling in May; it has declined by 1.1 million since February.
In another modest sign of economic recovery, retail sales increased 18.8 percent in May as many businesses began reopening, and customers bought items such as clothing and autos for the first time since stay-at-home orders began in March.
The construction industry in May rehired half the people it let go in April, with a majority — 325,000 — of them in specialty trades. The 105,000 construction job gains were largely in residential building.
24 Hour Fitness said it will permanently close more than 100 locations as part of a restructuring as it prepares to enter Chapter 11 bankruptcy. The firm said in its filing that it has landed $250 million to help reopen some of its locations and expects most to be operating by the end of June.
The government reported that California, Oklahoma and New York saw the largest increases in jobless claims for the week ending June 6, while Florida, Texas and Georgia had the greatest decreases.