Tag Archives: furloughed

U.S. Transportation Department says 3,700 employees furloughed

WASHINGTON (Reuters) – The U.S. Transportation Department said Friday that 3,700 employees had been temporarily furloughed after Congress failed to reauthorize surface transportation programs before a deadline that expired early Friday.

A department spokesperson said the agency is “taking every step we can to mitigate the impacts of this temporary lapse in authorization.” Safety critical employees are exempt from the furloughs. Aides said U.S. lawmakers are considering a 30-day surface transportation extension as negotiations continue over a pair of infrastructure and spending bills.

(Reporting by David Shepardson)

Persistently high U.S. weekly jobless claims point to labor market scarring

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing new claims for jobless benefits rose to a two-month high last week, stoking fears the COVID-19 pandemic was inflicting lasting damage to the labor market.

The weekly unemployment claims report from the Labor Department on Thursday, the most timely data on the economy’s health, also showed at least 25 million were on jobless benefits at the end of September. It reinforced views the economy’s recovery from the recession, which started in February, was slowing and in urgent need of another government rescue package.

The economic hardship wrought by the coronavirus crisis is a major hurdle to President Donald Trump’s chances of getting a second term in the White House when Americans go to the polls on Nov. 3. Former Vice President Joe Biden, the Democratic Party’s candidate, has blamed the Trump administration’s handling of the pandemic for the worst economic turmoil in at least 73 years.

“The increase in initial claims is disturbing,” said Chris Low, chief economist at FHN in New York. “It is difficult to see it and not think the recovery is vulnerable.”

Initial claims for state unemployment benefits increased 53,000 to a seasonally adjusted 898,000 for the week ended Oct. 10. Data for the prior week was revised to show 5,000 more applications received than previously reported.

Economists polled by Reuters had forecast 825,000 applications in the latest week. The surprise increase came even as California processed no claims. California, the most populous state in the nation, suspended the processing of new applications for two weeks in late September to combat fraud. It resumed accepting claims last Monday.

Unadjusted claims rose 76,670 to 885,885 last week. Economists prefer the unadjusted number given earlier difficulties adjusting the claims data for seasonal fluctuations because of the economic shock caused by the pandemic. Including a government-funded program for the self-employed, gig workers and others who do not qualify for the regular state unemployment programs, 1.3 million people filed claims last week.

Seven months into the pandemic in the United States, first-time claims remain well above their 665,000 peak during the 2007-09 Great Recession, though below a record 6.867 million in March. With new COVID-19 cases surging across the country and the White House and Congress struggling to agree on another rescue package for businesses and the unemployed, claims are likely to remain elevated.

Treasury Secretary Steven Mnuchin said on Thursday he would keep trying to reach a deal with House Speaker Nancy Pelosi, a Democrat, before next month’s election.

Stocks on Wall Street were lower. The dollar gained versus a basket of currencies. U.S. Treasury prices rose.

MILLIONS EXHAUST BENEFITS

About 3.8 million people had permanently lost their jobs in September, with another 2.4 million unemployed for more than six months. Economists fear those numbers could swell.

Though the claims report showed a decline in the number of people on unemployment rolls in early October, economists said that was because many people had exhausted their eligibility for benefits, which are limited to six months in most states.

The number of people receiving benefits after an initial week of aid declined 1.165 million to 10.018 million in the week ending Oct. 3.

About 2.8 million workers filed for extended unemployment benefits in the week ending Sept. 26, up 818,054 from the prior week. That was the largest weekly gain since the program’s launch last spring. These benefits are set to expire on Dec. 31.

Tens of thousands of airline workers have been furloughed. State and local government budgets have been crushed by the pandemic, leading to layoffs that are expected to escalate without help from the federal government.

“Risks to the labor market outlook are weighted heavily to the downside,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “The increased spread of the virus across much of the country could result in an even larger pullback in business activity than expected.”

Though economic activity rebounded in the third quarter because of fiscal stimulus, the stubbornly high jobless claims suggest momentum ebbed heading into the fourth quarter.

Other reports on Thursday showed mixed fortunes for regional manufacturing in October. A survey from the New York Federal Reserve showed its business conditions index fell seven points to a reading of 10.5 this month. Companies reported continued gains in new orders and shipments, though unfilled orders maintained their decline. Factory employment rose modestly, but the average workweek increased significantly.

Separately, the Philadelphia Fed said its business conditions index jumped to a reading of 32.3 from 15.0 in September. Measures of new orders and shipments at factories in the region that covers eastern Pennsylvania, southern New Jersey and Delaware rose. A gauge of factory employment fell, but manufacturers increased hours for workers.

Third-quarter GDP growth estimates are topping a 32% annualized rate. The economy contracted at a 31.4% pace in the second quarter, the deepest decline since the government started keeping records in 1947. Growth estimates for the fourth quarter have been cut to as low as a 2.5% rate from above a 10% pace.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci)

New York City mayor announces more furloughs to counter budget shortfall

(Reuters) – Over 9,000 New York City employees will be furloughed for five days between October and March to save about $21 million as the city battles a severe budget shortfall from the coronavirus pandemic, Mayor Bill de Blasio said on Wednesday.

“It’s a difficult one because it will affect real people and their lives, it will affect their families,” de Blasio told reporters.

The furloughs will impact city employees in managerial positions and non-union employees, he said.

Last week, de Blasio announced that everyone in the mayor’s office, including the mayor himself, will be furloughed for one week without pay beginning Oct. 1.

The coronavirus outbreak had caused the city to lose $9 billion in revenue and forced a $7 billion cut to the city’s annual budget, de Blasio said.

“What would really solve this? A federal stimulus – and it’s shocking that it still hasn’t happened,” the mayor said, adding he was also still in negotiation with the state to obtain greater borrowing power.

(Reporting by Maria Caspani, Editing by Chizu Nomiyama and Diane Craft)

New York mayor furloughs himself, staff for week to ease pandemic budget gap

NEW YORK (Reuters) – Everyone in the New York City mayor’s office, including the mayor himself, will be furloughed for one week without pay beginning Oct. 1 to close a budget shortfall created by the pandemic, Mayor Bill de Blasio announced on Wednesday.

The coronavirus outbreak had caused the city to lose $9 billion in revenue and forced a $7 billion cut to the city’s annual budget, de Blasio told reporters.

The furloughs will save only about $1 million, the mayor said, but may serve as a useful symbol as he continues to negotiate with labor unions representing municipal employees over broader payroll savings. De Blasio plans to work without pay during his own week-long furlough, the New York Times reported.

“It was not a decision I made lightly,” he told reporters. “To have to do this is painful for them and their families, but it is the right thing to do at this moment in history.”

With the furloughs and other savings, the mayor’s office budget this fiscal year will be 12% smaller than it was last year, de Blasio said, though he did not provide absolute totals.

The policy will affect 495 staff, the Times reported, and the week-long furloughs will be staggered among them between October and March 2021. De Blasio has warned he may have to lay off 22,000 city employees if savings cannot be found in the negotiations with the labor unions.

He is also seeking greater borrowing power from state lawmakers in Albany, New York state’s capital, who have been resistant so far.

(Reporting by Jonathan Allen; Editing by Jonathan Oatis and Lisa Shumaker)

Key U.S. lawmakers back unions’ call for new airline bailout

By David Shepardson and Tracy Rucinski

WASHINGTON/CHICAGO (Reuters) – Key U.S. House Democrats are backing a push by airline unions for a new round of government bailouts to keep workers employed in the face of tens of thousands of possible layoffs this fall.

Representative Peter DeFazio, who chairs the House Transportation and Infrastructure Committee, and other Democrats are circulating a letter to colleagues calling for the extension of payroll assistance. In March, Congress approved $32 billion for airlines and contractors in exchange for the companies keeping workers on the job through Sept. 30. Airline unions in June sought another $32 billion to keep workers employed through March 31.

The lawmakers’ letter said “with the current resurgence of COVID-19 in several states across the country and a vaccine for the virus yet to be developed, passenger demand for air travel will not recover before” Sept. 30 and “hundreds of thousands of airline workers may be fired or furloughed starting October 1.”

Airline unions on Wednesday asked lawmakers to sign on to the DeFazio letter.

On Wednesday, American Airlines said it was sending 25,000 notices of potential furloughs to front-line workers. American had already warned that furloughs would be hard to avoid as pandemic-hit revenue remains more sluggish than the airline had hoped.

American said Wednesday it would be “supportive” of any legislation that would protect employee jobs, while an industry trade group previously said airlines were not seeking additional assistance “at this time.”

United Airlines has sent 36,000 furlough notices, representing about 45% of workers, and Southwest Airlines has warned job losses will be hard to avoid.

Delta Air Lines Inc said this week it believed it could avoid furloughs in the fall after about 17,000 employees signed up for early departure deals.

After boosting summer flying following some signs of pent-up leisure demand in May and June, some airlines are now scaling back their schedules due to a surge in COVID-19 cases across the country.

(Reporting by David Shepardson and Tracy Rucinski; Editing by Chizu Nomiyama and Steve Orlofsky)