For the first time in just over five months, the United States unemployment rate fell below 1 million. According to the Department of Labor, an estimated 963,000 people filed for first time unemployment during the week of August 3 which was better than experts predicted. While these numbers can be taken positively, they should be taken with a grain of salt as they continue to show that both small businesses and large workforces are having to make difficult decisions to close their doors permanently or cut significant portions of their workforce.
Many people have the misconception that only small businesses are closing or laying off their staff, but the reality is far different. Just in the month of August, household names like Men’s Warehouse, Stein Mart and Lord & Taylor have filed for protection from bankruptcy while NBC Universal is reportedly laying off somewhere around 10% of their 35,000 person workforce.
Taken holistically, unemployment since the start of the Coronavirus in the United States total number of unemployed persons remains at levels that haven’t been seen since the recession of 2007 and 2008. In total, the unemployment rate is 10.2% compared to 3.5% in February just prior to COVID-19 becoming a major issue in the United States.
Complicating trouble for the unemployed is that the extra $600 weekly stipend from the federal government as part of the CARES Act ended at the end of July when Republicans and Democrats in Congress were unable to reach an agreement on a new stimulus package. In recent days, President Trump has signed Executive Orders offering $400 in extra money plus whatever the state pays, but it is unclear whether Americans will ever see a penny of this money. With Congress now in the midst of their annual summer recess, it’s unclear when or if ever there will be another stimulus package. Further complicating matters is that if a stimulus bill is agreed too it is unlikely that Americans would see that money for several months when it is needed now to pay for rent, food and other household necessities.
With the election only a few months away, many undecided voters are likely to use that time to make a decision on whether to vote for President Trump, democratic nominee Joe Biden or a third party candidate making it even more imperative that swift action be taken to improve the economic uncertainty in the United States.