Record 38.6 million Americans file for unemployment aid as McConnell vows end to extra benefits

Staggering job losses continue even as many states across the country begin to reopen businesses amid the coronavirus pandemic

Another 2.4 million Americans filed for unemployment benefits last week as the coronavirus pandemic continued to cause one of the most expansive stretches of job loss in US history.

The vast majority of job cuts have been concentrated among low-wage workers and households making less than $40,000, as 20 percent of people who had jobs in February said they were either furloughed or laid off by March or April, according to a recent Federal Reserve study.

As the official unemployment rate soared above 14.7 percent in April, Senate Majority Leader Mitch McConnell declined to take up new measures meant to aid unemployed workers and companies that have been forced to shutdown due to stay-at-home orders in states across the country.

During a Wednesday phone call with House Republicans, Mr McConnell vowed the enhanced unemployment benefits available to those applicants “will not be in the next bill” when it comes to a vote in the US Senate, Politico reported.

The enhanced benefits, which provided unemployed workers an additional $600 a week, was met with criticism from some conservative lawmakers who criticised how a number of Americans filing for benefits may receive more money on unemployment amid the pandemic than they would have had they remained in the workforce. Analysts have noted that number of Americans was likely far fewer than the amount of workers losing income and unable to keep up with their bills and rent or mortgage payments, even with the additional funds provided by the nearly $3trn House bill.

Mr McConnell has refused to take up the latest sweeping legislation passed in the House that would extend much of the relief included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, instead saying he would like to see how the current funding was used before approving new measures.

While the latest figures represented another consecutive week in which the total number of applicants filing for aid declined, they continued to show more jobs being lost even as many states across the country began to reopen.

Nearly half of Americans said that either their incomes have declined or they live with another adult who has lost pay through a job loss or reduced hours, the Census Bureau said in survey data released Wednesday. More than one-fifth of Americans said they had little or no confidence in their ability to pay the next month's rent or mortgage on time, the survey found.

During April, US employers shed 20 million jobs, eliminating a decade's worth of job growth in a single month.

Since then, 10 million more laid-off workers have applied for jobless benefits. Federal Reserve Chair Jerome Powell said in an interview on Sunday that the unemployment rate could peak in May or June at 20 to 25 percent.

Across industries, major employers continued to announce job cuts. Uber said this week that it will lay off 3,000 employees, on top of 3,700 it has already cut, because demand for its ride-hailing services has plummeted. Vice, a TV and digital news organisation tailored for younger people, announced 155 layoffs globally last week.

Digital publishers Quartz and BuzzFeed, magazine giant Conde Nast and the company that owns the business-focused The Economist magazine also announced job cuts last week.

The total number of people receiving benefits rose 2.5 million to 25 million in the week that ended May 9, the latest period for which data is available.

Though the flood of layoffs has slowed, last week's claims filings are still roughly 10 times the typical number that prevailed before the virus struck.

At the same time, some companies have begun to rehire a limited number of their laid-off employees as states have eased restrictions on movement and commerce.

Some economists see tentative signs that economic activity might be starting to recover, if only slightly, now that all the states have moved towards relaxing some restrictions on movement and commerce.

In most industries, employees are working more hours than in mid-April, the peak of the virus-related shutdowns nationwide. Data from Kronos, a software company that tracks 3 million hourly workers, showed that shifts worked at its 30,000 client companies are up 16 percent since the week that ended 12 April. Still, the shifts are still down a sizeable 25 percent from pre-virus levels.

Even in states that have been reopened the longest, like Georgia, not enough shoppers are visiting stores and restaurants to support significant rehiring, according to reports.

Additional reporting by Associated Press