In the week ending July 4, 1.3 million Americans filed first-time unemployment claims, according to the Department of Labor. It was a drop of 99,000 from the previous week’s revised level, but the number of continued claims, which counts workers who have filed for at least two consecutive weeks, held steady at 18.1 million.

Continued claims peaked in May and have been trending downward but at a slow pace that bodes poorly for the economy.

“A full recovery in the labor market is going to be a multi-year process and we think the resurgence in COVID-19 infections raises the risk that there will be a pause in the progress,” said Nancy Vanden Houten, lead economist at Oxford Economics.

The jobless claims come as some two dozen states halt or reverse the rollback of social-distancing requirements amid a surge in cases of the novel coronavirus.

Nearly 14.4 million people claimed continued benefits under a pandemic assistance program created by Congress in March. So far, the total number of workers filing claims under pandemic unemployment programs, pandemic emergency unemployment assistance programs, and traditional unemployment is nearly 33 million.

The Federal Reserve Bank of Atlanta, in a report this week, said firms do not anticipate a return to pre-COVID employment levels until sometime after 2021.

“Firms’ current employment levels are, on average, a little more than 5 percent lower than they were pre-COVID,” the Atlanta Fed said. “Firms anticipate holding their employment levels roughly constant over the second half of 2020 and then ramping up hiring in 2021.”

The Atlanta Fed surveyed CFOs between June 15 and 26 and collected nearly 300 responses.

The central bank said the pace of hiring was likely not fast enough to restore firms to pre-COVID employment levels by the end of 2021. “Although there is a wide range of responses among our panel, there is a definite tilt downward,” it said.

Brian van der Brug / Los Angeles Times via Getty Images

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