CORONAVIRUS

Texas job losses fall again, still ‘long way’ from recovery

Bob Sechler
A sign at Domain Northside in early May encourages social distancing among shoppers. New data on claims for unemployment benefits indicate coronavirus-induced job losses are slowing, although economists say an overall recovery remains distant.

The number of Texans filing first-time claims for unemployment benefits has declined for a fifth straight week, coming in at about 51,500 — the lowest total since the coronavirus pandemic first slammed the state’s economy in March.

But the figure for the week ending Aug. 8 remains about four times higher than typical by pre-pandemic standards.

In addition, weekly continuing claims for benefits — meaning filings from Texans already on the unemployment rolls — ticked up by a small amount to about 1.24 million, according to the most recent data available from the U.S. Labor Department, nearly 10 times more than in the same period last year.

Taken together, economists said, the figures indicate that a recovery from the pandemic-induced downturn remains distant, even as new layoffs stemming from it have been tapering.

“There are still a lot of people losing their jobs, and more importantly there are a ton of people still unemployed,” said Jason Schenker, president of Prestige Economics in Austin.

The labor department’s continuing claims data is released on a delay, so the figure for initial claims is for the week ending Aug. 8, while the figure for continuing claims is for the week ending Aug. 1.

Nationally, weekly initial claims came in at 963,000 in the agency’s latest report — down about 228,000 from the previous week and the first time the number has been below 1 million since March.

But the amount of new claims remains huge by historic measures, far outpacing the pre-pandemic weekly high of about 695,000 set in October 1982.

In addition, the labor department said about 28.3 million people claimed some form of jobless benefits during the week ending July 25 — including through state programs and through pandemic-related federal assistance — down from the previous week but well above the estimated 1.7 million who did so through all programs during the comparable period a year ago.

Ray Perryman, president of the Waco-based economic analysis firm the Perryman Group, said the declining but still sky-high pace of initial claims “basically means that layoffs are continuing, but slowing.”

The numbers “suggest that some progress is being made, but that we still have a long way to go in the recovery,” he said, adding that the upshot “for quite some time” is likely to be an elevated jobless rate and overall employment well below pre-pandemic levels.

Schenker concurred, saying he thinks the direction of the economy will be “very COVID dependent” for the foreseeable future. COVID-19 is the disease caused by the coronavirus.

“Until we get COVID under control, we are going to have these really high jobless claims,” Schenker said. “We are not going to get back to full economic output until we can really quash this thing.”

The Federal Reserve Bank of Dallas — in a report last week topped by an illustration of a car running off a road — described as stalled what had been signs of budding improvement in the Texas economy during May and June. The Dallas Fed blamed the development on a resurgence in coronavirus cases, which came in the wake of efforts during both those months to open the state back up by lifting virus-related restrictions on many businesses.

“Industries which rely on face-to-face contact, such as tourism and retail, have suffered sharp pullbacks in activity” amid the increase in cases, Dallas Fed economist Christopher Slijk said in written comments accompanying the report.

Meanwhile, Congress has yet to agree on a new financial assistance program to help buoy out-of-work Americans and the economy overall, after the previous effort — which provided an additional $600 weekly federal unemployment payment — expired at the end of July.

Democrats have been aiming to reinstate the extra $600 through the end of the year, but Republicans want it cut to $200 a week. President Donald Trump has said he intends to enact a plan of his own, although there is debate on whether he can legally bypass Congress on the issue.

In Texas, the statewide unemployment rate came in at 8.6% on a seasonally adjusted basis in June, down from 13% in May. In the Austin metro area, the unemployment rate registered 6.4% in June on a seasonally adjusted basis, compared to 10.3% in May.

The Austin economy had been booming prior to the pandemic, with a seasonally adjusted unemployment rate of 2.6% in February. The statewide rate in February was 3.5%.

Figures for July are scheduled to be released Aug. 21.