The number of laid-off workers applying for unemployment aid fell below 1 million last week for the first time since the pandemic intensified five months ago yet still remains at a high level. The viral pandemic keeps forcing layoffs just as the expiration of a $600-a-week federal jobless benefit has deepened the hardships for many.

The Labor Department said applications fell to 963,000, the second straight drop, from 1.2 million the previous week. The decline suggests that layoffs are slowing, though last week’s figure still exceeds the pre-pandemic record of just under 700,000.

Follow latest updates on coronavirus here

The pandemic, the shutdowns that are meant to fight it and the reluctance or inability of many people to shop, travel or eat out are continuing to weaken the economy and force companies to cut staff. Twenty-three states have paused or reversed their business re-openings. In a hopeful sign, the rate of new confirmed viral cases has declined in the past couple of weeks, though it remains far above the rates that prevailed in May and June.

All told, fewer people are also continuing to receive state jobless aid. That figure dropped to 15.5 million, from 16.1 million the previous week.

For months, the unemployed had also been receiving the $600 a week in federal jobless aid on top of their state benefit. But the federal payment has expired, and negotiations in Congress to extend that benefit, likely at a lower level of payment, have collapsed in rancor.

Click here for complete coronavirus coverage

The supplemental federal aid had enabled many jobless Americans to afford rent, food and utilities, and its expiration threatens to weaken consumer spending and further slow the economy. Unemployment benefits have accounted for roughly 5 per cent of national income since April, a larger share than even Social Security. The loss of the $600 has shrunk benefits for the average recipient by one-half to three-quarters.

Michelle Meyer, an economist at Bank of America Merrill Lynch, says that the loss of the additional aid will reduce Americans’ incomes by $18 billion a week.

“That’s a big hit to purchasing power,” she said.

Last week, President Donald Trump issued an executive order that would provide $300 a week in federal aid to the jobless to replace the expired $600-a-week benefit. But experts say it would take weeks for the states to implement that payment.

In addition to people who applied last week for state benefits, nearly 489,000 others sought jobless aid under a new program that has made self-employed and gig workers eligible for the first time. That figure isn’t adjusted for seasonal trends, so it’s reported separately.

But including that group, the Labor Department says 28.2 million people are receiving some form of unemployment benefits, though that figure may be inflated by double-counting by some states.