Job Picture Worsens: Millions More File For Unemployment, In Reversal

Updated at 11:34 a.m. ET

New claims for unemployment benefits rose last week for the first time in four months — since March 28 — as states began reimposing lockdown restrictions in an effort to reverse a surge of coronavirus cases.

More than 1.4 million new claims were filed during the week ending July 18, an increase of more than 100,000 over the week before, the Labor Department reported Thursday.

In addition, claims for Pandemic Unemployment Assistance, which helps people who are self-employed or who don't qualify for regular benefits, went up nearly 20,000 to about 975,000.

The number of new claims had been steadily ticking downward since March, when nearly 7 million people filed for unemployment insurance in a single week. Last week's numbers marked the first reversal of that trend.

The increases are evidence that the labor market is deteriorating as businesses around the country close their doors again in response to an intensified coronavirus pandemic.

"The labor market remains in a precarious place, as COVID-19 cases surge in some parts of the country and fresh lockdown measures are adopted in response," said Nancy Vanden Houten, lead economist at Oxford Economics.

Nearly 4 million cases of the virus have been reported in the U.S. with dozens of states reporting an uptick in cases — especially in Sunbelt states such as Arizona, Florida and Texas — and some states have begun reimposing lockdowns.

California had been slowly allowing businesses to reopen, only to reverse itself last week. Malls, restaurants and hair salons in the largest counties were ordered to stop serving customers indoors as cases spiked.

The upticks in filings come as Congress debates whether to extend federal unemployment insurance related to the pandemic, which expires in days.

"The combination of the resurgence of COVID-19, especially across the Sun Belt, bankruptcies, and secondary layoffs finally stopped the decline," said Robert Frick, corporate economist at Navy Federal Credit Union.

The 109,000 increase in first-time regular claims came even as continued claims dropped by 1.1 million, to 16.2 million.

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