Unemployment claims jumped last week, as the delta variant of the coronavirus sparked rising caseloads around the country and renewed fears about the potential for more restrictions and business closures.
The number of new claims grew to 419,000 from 368,000, the third time in six weeks that they had ticked up, according to data from the Department of Labor.
Economists said the uptick was concerning but cautioned that it was too early to tell whether it was a one week aberration or telegraphed a more concerning turn for the labor market.
“The unexpected bump in claims could be noise in the system, but it’s also not hard to see how the rise of the covid-19 delta variant could add thousands of layoffs to numbers that already are double what they were pre-Covid,” said Robert Frick, corporate economist at Navy Federal Credit Union.
Overall, unemployment numbers have been falling gradually from the peaks at other stages of the pandemic, but they are still well above pre-pandemic averages.
The jobless numbers have provided a jarring catalogue about the economic devastation wrought by the pandemic — spiking to records as the pandemic unfolded in March 2020, and remaining at historic high levels throughout most of 2020.
The coronavirus surge last fall helped precipitate a rise in claims that saw the labor market, as seen in the monthly jobs report, slide backward too.
But until recently, the last few months been marked by strong jobs growth and a sense of optimism as vaccinations picked up, giving economists hope that the country was back on track to recovering the nearly 7 million jobs it is still down from before the pandemic.
Now, the delta variant is driving an alarming increase in covid-19 cases around the country, according to public health officials: the number of new cases increased more than 40 percent in the last week, sending jitters through the stock market, and is raising questions about whether state and local health authorities will reinstitute restrictions to slow the virus’ spread.
Frick said that the report showed the potential for unemployment claims to start trending upward after months of steady declines.
“There’s definitely a correlation, however loose, that the rise in covid does cause a rise in claims,” he said. “My fear is that the rise in the delta variant could cause claims to go back up…Certainly one week doesn’t show that. But I wouldn’t be surprised if we start to see claims rise.”
However, there are also lots of signs that the economy continues to rebound despite rising caseloads.
The more than 2.2 million people that the Transportation Security Administration said it screened at airports on Sunday was the most since late February 2020 — and nearly three times the amount it was on the same day last year.
Restaurant dining has largely rebounded in recent months, at times surpassing the levels from before the pandemic — on Saturday the number of diners was 1 percent higher than the same day in 2019, according to data from Open Table.
Last week, some 12.5 million claims were filed for unemployment insurance overall, according to the most recent numbers — down from 32.9 million filed at the same point last year.
Nevada, Rhode Island and California topped the list of states with the highest number of people on unemployment, the Labor Department said.
Economic concerns in recent months have been more focused on the ways that workers are still held back from filling some of the more than 9 million job openings in the country, than unemployment, with high hopes that school re-openings in the fall will help many parents get back into the labor force.
The financial challenges caused by the COVID-19 pandemic forced hundreds of hospitals across the nation to furlough, lay off or reduce pay for workers, and others have had to scale back services or close.
Lower patient volume, canceled elective procedures and higher expenses tied to the pandemic have created a cash crunch for hospitals, and hospitals are taking a number of steps to offset financial damage. Executives, clinicians and other staff are taking pay cuts, capital projects are being put on hold, and some employees are losing their jobs. More than 260 hospitals and health systems furloughed workers in the last year, and dozens of others have implemented layoffs.
Below are six hospitals and health systems that are laying off employees in the next 2 months. Some of the layoffs were attributed to financial strain caused by the pandemic.
1. Sacramento, Calif.-based Sutter Healthis laying off hundreds of employees, most of whom work in information technology. In a filing with the state, Sutter said it plans to lay off 277 employees on April 2. The 277 jobs being eliminated include 92 analysts, 43 engineers and 28 project managers, according to the Sacramento Business Journal, citing the system’s filing with California’s Employment Development Department.
2. Plattsburgh, N.Y.-based Champlain Valley Physicians Hospitalplans to cut 60 jobs. The hospital, which is facing a $6.5 million deficit in fiscal year 2021, said the cuts include 10 people who were laid off or had permanent hour reductions, 12 people who are planning retirement, and the rest are open positions that will not be filled.
3. Hialeah (Fla.) Hospital is closing its maternity ward and laying off 62 employees April 5, according to a notice filed with the state. Most of those affected by the layoffs are registered nurses.
4. The outgoing owners of Providence Behavioral Health Hospitalin Holyoke, Mass., are laying off the hospital’s 151 employees, effective April 20, according to MassLive. Trinity Health of New England, part of Livonia, Mich.-based Trinity Health, is selling the hospital to Health Partners New England, which plans to take over the hospital April 20.
5. Olympia Medical Center in Los Angeles is slated to close March 31. The closure will result in the layoffs of about 450 employees.
6. Minneapolis-based Children’s Minnesota is laying off 150 employees, or about 3 percent of its workforce. Children’s Minnesota cited several reasons for the layoffs, including the financial hit from the COVID-19 pandemic. Some layoffs occured in December and the rest will occur at the end of March.
Soon after the COVID-19 pandemic began last spring, Christine Choi, DO, a second-year medical resident at Harbor-UCLA Medical Center, volunteered to enter COVID-19 patient rooms. Since then, she has worked countless nights in the intensive care unit in full protective gear, often tasked with giving the sickest patients and their families the grim choice between intubation or near-certain death.
“I’m offering this guy two terrible options, and that’s how I feel about work: I can’t fix this for you and it sucks, and I’m sorry that the choices I’m giving you are both terrible,” Choi told the Los Angeles Times’ Soumya Karlamangla about one patient encounter.
While Choi exhibits an “almost startlingly positive attitude” in her work, it’s no match for the psychological burdens placed on her shoulders by the global pandemic, Karlamangla wrote. When an older female COVID-19 patient died in the hospital recently, her husband — in the same hospital with the same diagnosis — soon began struggling to breathe. Sensing that he had little time left, Choi held a mobile phone at his bedside so that each of his children could come on screen to tell him they loved him. “I was just bawling in my [personal protective equipment],” Choi said. “The sound of the family members crying — I probably will never forget that,” she said.
It was not the first time the young doctor helped family members say goodbye to a loved one, and it would not be the last. Health care providers like Choi have had to work through unimaginable tragedies and unprecedented circumstances because of COVID-19, with little time to dedicate to their own mental health or well-being.
It has been nearly a year since the US reported what was believed at the time to be its first coronavirus death in Washington State. Since then, the pandemic death toll has mushroomed to nearly 500,000 nationwide, including 49,000 Californians. These numbers are shocking, and yet they do not capture the immeasurable emotional weight that falls on the health care providers with the most intimate view of COVID-19’s deadly progression.“The horror of the pandemic has unfolded largely outside public view and inside hospitals, piling a disproportionate share of the trauma on the people whose work takes them inside their walls,” Karlamangla wrote.
Experts are deeply concerned about the psychological and physical burdens that providers must bear, and the fact that there is still no end in sight. “At least with a natural disaster, it happens, people get scattered all over the place, property gets damaged or flooded, but then we begin to rebuild,” Lawrence Palinkas, PhD, MA, a medical anthropologist at USC, told Karlamangla. “We’re not there yet, and we don’t know when that will actually occur.”
Sixty-eight percent of providers said they feel emotionally drained from their work, 59% feel burned out, 57% feel overworked, and 50% feel frustrated. The poll asked providers who say they feel burned out what contributes most to that viewpoint. One doctor from the Central Valley wrote:
“Short staffed due to people out with COVID. I’m seeing three times as many patients, with no time to chart or catch up. Little appreciation or contact from my bosses. I have never had an N95 [mask]. The emotional toll this pandemic is taking. Being sick myself and spreading it to my wife and young kids. Still not fully recovered but needing to be at work due to physician shortages. Lack of professional growth, and a sense of lack of appreciation at work and feeling overworked. The sadness of the COVID-related deaths and the stories that go along with the disease. That’s a lot of stuff to unpack.”
For one female doctor from the Bay Area who responded to the CHCF survey, the extra burdens of the pandemic have been unrelenting: “Having to work more, lack of safe, affordable, available childcare while I’m working. As a single mother, working 15 hours straight, then having to care for my daughter when I get home. Just exhausted with no days off. So many Zoom meetings all day long. Miss my family and friends.”
It is unclear how the pandemic will affect the health care workforce in the long term. For now, the damage “can be measured in part by a surge of early retirements and the desperation of community hospitals struggling to hire enough workers to keep their emergency rooms running,” Andrew Jacobs reported in the New York Times.
One of the early retirements Jacobs cited was Sheetal Khedkar Rao, MD, a 42-year-old internist in suburban Chicago. Last October, she decided to stop practicing medicineafter “the emotional burden and moral injury became too much to bear,” she said. Two of the main factors driving her decision were a 30% pay cut to compensate for the decline in revenue from primary care visits and the need to spend more time at home after her two preteen children switched to remote learning.
“Everyone says doctors are heroes and they put us on a pedestal, but we also have kids and aging parents to worry about,” Rao said.
Working Through Unremitting Sickness and Death
In addition to the psychological burden, health care providers must cope with a harsh physical toll. People of color account for most COVID-19 cases and deaths among health care workers, according to a KFF issue brief. Some studies show that health care workers of color “are more likely to report reuse of or inadequate access to [personal protective equipment] and to work in clinical settings with greater exposure to patients with COVID-19.”
“Lost on the Frontline” provides the most comprehensive picture available of health care worker deaths, because the US still lacks a uniform system to collect COVID-19 morbidity and mortality data among health care workers. A year into the project, the federal government has decided to take action. Officials at the US Department of Health and Human Services cited the project when asking the National Academies of Sciences, Engineering, and Medicine for a rapid expert consultation to understand the causes of deaths among health care workers during the pandemic.
The National Academies’ report, published December 10, recommends the “adoption and use of a uniform national framework for collecting, recording, and reporting mortality and morbidity data” along with the development of national reporting standards for a core set of morbidity impacts, including mental well-being and psychological effects related to working through public health crises. Some health care experts said the data gathering could be modeled on the federal government’s World Trade Center Health Program, which provides no-cost medical monitoring and treatment for workers who responded to the 9/11 terrorist attacks 20 years ago.
“We have a great obligation to people who put their lives on the line for the nation,” Victor J. Dzau, MD, president of the National Academy of Medicine, told Jacobs.
Tower Health said it is cutting salaries of executives and managers amid financial losses linked to the COVID-19 pandemic.
The West Reading, Pa.-based health system has struggled financially in the last two fiscal years. It recorded an operating loss of $378.2 million in fiscal year 2020, as well as an operating deficit of $178.8 million the year prior. And last November, the health system said it would consider selling six of its Philadelphia-area hospitals, including those it has purchased since 2017 from Franklin, Tenn.-based Community Health Systems, as part of a financial turnaround plan.
To help offset the financial damage, about 400 Tower Health executives and managers will have their pay cut, beginning in their Feb. 19 paychecks, according to The Philadelphia Inquirer, which cites a letter CEO Clint Matthews wrote to staff. Executives will have their pay cut by 15 percent, and directors, senior directors and associate vice presidents will have their pay cut by 10 percent.
In a statement shared with Becker’s on Feb. 8, the health system said it “is undertaking several initiatives as part of a coordinated plan to improve operations, strengthen care delivery and address the ongoing financial impact of COVID-19.”
“These actions include compensation reductions for executives and managerial employees, along with operational improvements to reduce costs and enhance revenue,” according to the Tower Health statement.
The salary cuts will be in effect until June 30, and do not affect front-line clinical or support staff, who received merit increases in January.
Tower Health projects cost savings of about $11.6 million because of the pay cuts.
“Reducing management compensation is a difficult but necessary decision that will stabilize and strengthen our financial performance as we continue to meet the challenges of the COVID-19 pandemic, as well as our ongoing mission of providing compassionate, accessible, high-quality, cost-effective healthcare to our communities,” the health system said.
The U.S. economy shrank 3.5 percent in 2020 as the coronavirus pandemic shuttered businesses, schools and events, marking the first annual contraction since the Great Recession, according to data released by the Commerce Department on Thursday.
U.S. gross domestic product (GDP) suffered its largest annual decline since 1946 due to the coronavirus pandemic, according to the Commerce Department release. The outbreak of COVID-19 caused the steepest economic collapse since the Great Depression, wiping out more than 20 million jobs and years of economic growth within two months.
U.S. GDP increased by an annualized rate of 4 percent in the final three months of 2020, according to the data released Thursday, following an annualized gain of 33.4 percent in the third quarter and a 31.4 percent annualized decline in the second quarter. But the economic rebound staged in the second half of 2020 has been dampened by the continued rapid spread of COVID-19 throughout the country.
The U.S. economy came into 2020 remarkably strong. Unemployment reached a 50-year low of 3.5 percent in the previous year, inflation remained low and the U.S. had just set a record for the longest economic expansion in its modern history. While the U.S. was likely to face some headwinds from slowing economies overseas, the stunning emergence of the coronavirus pandemic shattered the strong labor market and forced thousands of businesses to shutter.
Consumer spending — which makes up nearly two-thirds of the U.S. economy — fell 2.6 percent in 2020, driven mainly by a 3.4 percent decline in spending on services. Spending on goods rose 0.8 percent, however, as purchases shifted from gatherings to products that could be used during lockdowns.
Economists expect the U.S. economy to bounce back quickly in the second half of 2021, assuming enough Americans are vaccinated to prevent large coronavirus outbreaks. Both economists and health experts insist that a full return to normal is not possible until the pandemic is defeated.
Roughly 9 million jobs lost during the onset of the pandemic have yet to be recovered, and those without work have struggled to get by with swaths of the economy still largely shut down by the virus. The federal government approved more than $4 trillion to fund pandemic response and economic rescue in 2020, though Democratic lawmakers and many economists say more is still needed.
President Biden and congressional Democrats are pushing to pass another $1.9 trillion COVID-19 bill meant to ramp up vaccine distribution and offer more economic relief to those in the greatest need.
Republican lawmakers have not ruled out passing another relief bill, but most object to the size and scope of Biden’s proposal after approving a $900 billion measure in December.
Treasury Secretary Janet Yellenand Federal Reserve Chairman Jerome Powell have both warned lawmakers that the risks of holding back on necessary fiscal relief are far greater than adding more to the national debt or risking an increase in inflation.
“I’m much more worried about falling short of a complete recovery and losing peoples’ careers and lives and the damage that will do to productive capacity than about the possibility of higher inflation,” Powell said Wednesday.
The number of new unemployment claims filed last week jumped by 181,000 the week before to 965,000, the largest increase since the beginning of the pandemic.
It was the largest number of new unemployment claims since August.
An additional 284,000 claims were filed for the Pandemic Unemployment Assistance, the insurance for gig and self-employed workers.
The weekly report is President Trump’s last before President-elect Joe Biden is sworn in on Jan. 20. Biden will inherit a labor market badly weakened by the coronavirus pandemic and an economic recovery that appears to have stalled: 140,000 people lost their jobs in December, the first decline in months, with the U.S. still down millions of jobs since February.
The dire numbers will serve as a backdrop for Biden as he formally unveils an ambitious stimulus package proposal on Thursday, which could top $1 trillion, and is expected include an expansion of the child tax credit, a $2,000 stimulus payment, and other assistance for the economy.
Economists say that the economy’s struggles could be explained, in part, by the delay Congress allowed between the summer, when many fiscal aid programs expired and December, when lawmakers finally agreed on a new package after months of stalemate.
The number of new jobless claims has come down since the earliest days of the pandemic, but remains at a extremely high level week in and week out.
The total number of continuing people in any of the unemployment programs at the end of the year was 18.4 million, although officials have cautioned that the number is inflated by accounting issues and duplicate claims.
The increase in claims is not entirely unexpected. As the aid package passed by Congress in December kicks in, including a $300 a week unemployment supplement, some economists expected that to result in more workers filing claims.
The economy lost 140,000 jobs in December, the first reported losses since April, as the unemployment rate remained steady at 6.7 percent.
Economists expected a small jobs gain of nearly 50,000. The drop is the latest sign of a weakening economy amid the ongoing COVID-19 crisis. All in all, the economy remains about 10 million jobs below its pre-pandemic levels.
“There’s not much comfort to be taken from the stable unemployment rate, given that millions of Americans have left the labor force with nearly 11 million listed as officially out of work,” said Mark Hamrick, senior economic analyst at Bankrate.com.
“Between the human and economic tolls taken by the pandemic, these are some of the darkest hours of this soon-to-be yearlong tragedy.”
The biggest losses were concentrated in leisure and hospitality, a sector particularly vulnerable to the effects of the pandemic, which lost an astonishing 498,000 jobs.
State and local government payrolls shed 51,000 jobs. Congress deferred passing state and local aid in its latest COVID-19 relief bill.
But the overall loss would have been worse had it not been for gains in professional and business services, which added 161,000 jobs; retail trade, which added 120,500 jobs; and construction, which added 51,000.
Some demographic groups have been hit harder by the economic downturn.
The unemployment rate for Hispanics rose to 9.3 percent in December, while Black unemployment remained elevated at 9.9 percent. The rate for whites was 6 percent, and for Asians it was 5.9 percent.
Over a third of jobless people have been unemployed for over 27 weeks.
Applications for jobless benefits resumed their upward march last week as the worsening pandemic continued to take a toll on the economy.
More than 947,000 workers filed new claims for state unemployment benefits last week, the Labor Department said Thursday. That was up nearly 229,000 from the week before, reversing a one-week dip that many economists attributed to the Thanksgiving holiday. Applications have now risen three times in the last four weeks, and are up nearly a quarter-million since the first week of November.
On a seasonally adjusted basis, the week’s figure was 853,000, an increase of 137,000.
Nearly 428,000 applied for Pandemic Unemployment Assistance, a federal program that covers freelancers, self-employed workers and others who don’t qualify for regular state benefits.
Unemployment filings have fallen greatly since last spring, when as many as six million people a week applied for state benefits. But progress had stalled even before the recent increases, and with Covid-19 cases soaring and states reimposing restrictions on consumers and businesses, economists fear that layoffs could surge again.
“It’s very clear the third wave of the pandemic is causing businesses to have to lay people off and consumers to cut back spending,” said Daniel Zhao, senior economist for the career site Glassdoor. “It seems like we’re in for a rough winter economically.”
Jobless claims rose in nearly every state last week. In California, where the state has imposed strict new limits on many businesses, applications jumped by 47,000, more than reversing the state’s Thanksgiving-week decline.
The monthly jobs report released on Friday showed that hiring slowed sharply in early November and that some of the sectors most exposed to the pandemic, like restaurants and retailers, cut jobs for the first time since the spring. More up-to-date data from private sources suggests that the slowdown has continued or deepened since the November survey was conducted.
“Every month, we’re just seeing the pace of the recovery get slower and slower,” said AnnElizabeth Konkel, an economist with the job site Indeed. Now, she said, the question is, “Are we actually going to see it slide backward?”
Many economists say the recovery will continue to slow if the government does not provide more aid to households and businesses. After months of gridlock in Washington, prospects for a new round of federal help have grown in recent days, with congressional leaders from both parties signaling their openness to a compromise and the White House proposing its own $916 billion spending plan on Tuesday. But the two sides remain far apart on key issues.
The stakes are particularly high for jobless workers depending on federal programs that have expanded and extended unemployment benefits during the pandemic. Those programs expire later this month, potentially leaving millions of families with no income during what epidemiologists warn could be some of the pandemic’s worst months.