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New unemployment claims in Md. spike higher

The number of new unemployment claims in Maryland jumped nearly 70% one week after posting the lowest figure of the coronavirus pandemic.

The 15,444 new claims for the week ending Sept. 26 represents the largest number of new filings since nearly 18,300 claims were filed on Aug. 1.

Just one week ago, Maryland saw its lowest number of total claims — 9,185 — since the pandemic-related economic impact was first felt in the spring. That low report was also the first week the number of claims dipped below 10,000 for any week and the first time during the pandemic that new claims fell below the largest number seen during the Great Recession.

Nationally, about 837,000 claims were filed last week, 36,000 fewer than the prior week.

The Labor Department’s report suggests that companies are still cutting a historically high number of jobs, though the weekly numbers have become less reliable as states have increased their efforts to root out fraudulent claims and process earlier applications that have piled up.

California, for example, which accounts for more than one-quarter of the nation’s aid applications, this week simply provided the same figure it did the previous week. That’s because the state has stopped accepting new jobless claims for two weeks so it can implement anti-fraud technology and address a backlog of 600,000 applications that are more than three weeks old.

Overall jobless aid has shrunk in recent weeks even as roughly 25 million people rely upon it. The loss of that income is likely to weaken spending and the economy in the coming months.

A $600-a-week federal check that Congress provided in last spring’s economic aid package was available to the unemployed in addition to each state’s jobless benefit. But the $600 benefit expired at the end of July. A $300 weekly benefit that President Donald Trump offered through an executive order lasted only through mid-September, although some states are still working to send out checks for that period.

A result is that Americans’ incomes  and spending are declining or slowing. Total paid unemployment benefits plunged by more than half in August, according to the Commerce Department. That pulled down Americans’ incomes for the month by 2.7% — a trend that, if it continues, could weaken economic growth.

Consumer spending did rise 1% that month, down from 1.5% in July. But that increase relied in part on consumers drawing upon their savings.

“Unless employment growth picks up, or additional (government) aid is extended, consumer spending is at risk of slowing dramatically during the second phase of the recovery,” said Gregory Daco, an economist at Oxford Economics.

Other measures of the U.S. economy have been sending mixed signals. Consumer confidence jumped in September, fueled by optimism among higher-income households, though it remains below pre-pandemic levels. And a measure of pending home sales rose in August to a record high, lifted by ultra-low mortgage rates.

Yet some real-time measures indicate that growth has lost momentum with the viral pandemic still squeezing many employers, especially small retailers, hotels, restaurants and airlines, nearly seven months after it paralyzed the economy.

Disney said this week that it’s cutting 28,000 jobs in California and Florida, a consequence of the damage it’s suffered from the viral outbreak and the shutdowns and attendance limits that were imposed in response. Allstate said it will shed 3,800 jobs — 7.5% of its workforce.

And U.S. airlines on Thursday began furloughing more than 32,000 employees, among the many who will likely lose jobs this month as federal aid to the airlines expires. The airlines were barred from cutting jobs as long as they were receiving government assistance. American and United had said they would begin the 32,000 furloughs after lawmakers and the White House failed to agree on a pandemic relief package that would extend the aid to airlines.

Daily Record government affairs reporter Bryan P. Sears and Christopher Rugaber of The Associated Press contributed to this story.

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