As pandemic-related job losses continue, federal unemployment benefits ended in July for millions of people.
“From my perspective, the loss of $600 a week for a huge number of people will have a huge effect on their livelihoods,” said Raymond McDonald, executive director of the Santa Barbara County’s Workforce Development Board.
“This probably puts more pressure on people to try and find work that is available.”
In the week ending July 25, McDonald said Santa Barbara County residents filed 804 unemployment assistance claims and 575 pandemic unemployment assistance claims.
According to the Bureau of Labor Statistics, the county faced a 11.6 percent unemployment rate for the month of June.
That is a little lower than the 12.9-percent unemployment rate in May, but well above the year-ago estimate of 3.4 percent.
“Certainly all of us are concerned about the fact that folks have bills to pay and they’ve had a huge loss of income,” McDonald said.
“The strong recovery we observed in May and were optimistic about going into the summer has clearly weakened,” said Mark Schniepp, director of the California Economic Forecast in Santa Barbara. “The economy is now moving sideways, at best.”
He reported the rise of continuing unemployment claims and surveys indicating that fewer people are currently working. This is due to the reversals in the economy and the depletion of the Paycheck Protection Program that rescued many workers from layoffs between April and June, he said.
Leisure and hospitality businesses have taken a blow from pandemic-related closures, and 22,000 people in that industry reported being unemployed in June, compared to the 16,000 who were unemployed in May, according to the California Economic Forecast.
The trade, transportation, and utilities sector of business has also been hit hard, with a reported 23,500 people unemployed in June.
“We’re hoping that with the loss of federal unemployment benefits, the unemployment numbers will start to go down because people will have to go back to work,” said Alma Janabajab, business services strategist at the county’s Workforce Development Board.
Schniepp said the ongoing pandemic-related closures and restrictions may cause the unemployment rate to stay elevated, and it may not improve in the third quarter of 2020.
The number of local small businesses is down 22 percent from what it was at the beginning of the year in January, he added.
“What is needed to rebound out of this mess is restoring confidence so consumers will leave their proverbial bunkers and go out and spend,” Schneipp said.