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Iowa Never Locked Down. Its Economy Is Struggling Anyway.

As far as the law is concerned, there is no reason that Amedeo Rossi can’t reopen his martini bar in downtown Des Moines, or resume shows at his concert venue two doors down. Yet Mr. Rossi’s businesses remain dark, and one has closed for good.

There are no restrictions keeping Denver Foote from carrying on with her work at the salon where she styles hair. But Ms. Foote is picking up only two shifts a week, and is often sent home early because there are so few customers.

No lockdown stood in the way of the city’s Oktoberfest, but the celebration was canceled. “We could have done it, absolutely,” said Mindy Toyne, whose company has produced the event for 17 years. “We just couldn’t fathom a way that we could produce a festival that was safe.”

President Trump and many supporters blame restrictions on business activity, often imposed by Democratic governors and mayors, for prolonging the economic crisis initially caused by the virus. But the experience of states like Iowa shows the economy is far from back to normal even in Republican-led states that have imposed few business restrictions.

A growing body of research has concluded that the steep drop in economic activity last spring was primarily a result of individual decisions by consumers and businesses rather than legal mandates. People stopped going to restaurants even before governors ordered them shut down. Airports emptied out even though there were never significant restrictions on domestic air travel.

States like Iowa that reopened quickly did have an initial pop in employment and sales. But more cautious states have at least partly closed that gap, and have seen faster economic rebounds in recent months by many measures.

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Credit…Kathryn Gamble for The New York Times

Economists say it is hard to estimate exactly how much economic activity is still being restrained by capacity limits, social-distancing rules and similar policies, many of which have been lifted or loosened even in places governed by Democrats. In most states, restaurants, retail stores and even bars are allowed to operate.

Perhaps the most widespread government action that has hindered economic growth is the decision by many school districts to adopt virtual learning at the start of the school year, which appears to have driven many parents, particularly women, out of the labor force to care for young children who would otherwise be in class.

But as the pandemic flares again in much of the country, most economists agree this much is clear: The main thing holding back the economy is not formal restrictions. It is people’s continued fear of the virus itself.

“You can’t just open the economy and expect everything to go back to pre-Covid levels,” said Michael Luca, a Harvard Business School economist who has studied the impact of restrictions during the pandemic. “If a market is not safe, people won’t participate in it.”

Iowa was one of only a handful of states that never imposed a full stay-at-home order. Restaurants, movie theaters, hair salons and bars were allowed to reopen starting in May, earlier than in most states. Gov. Kim Reynolds has emphasized the need to make the economy a priority, and has blocked cities and towns from requiring masks or imposing many other restrictions.

Even so, Iowa has regained just over half of the 186,000 jobs it lost between February and April, and progress — as in the country as a whole — is slowing. Many businesses worry they won’t be able to make it through the winter without more help from Congress. Others have already failed. Now, coronavirus cases are rising there.

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Vaudeville Mews, the small performance hall that Mr. Rossi opened in Des Moines in 2002, was a labor of love even in the best of times. The venue attracted a fan base with its willingness to book independent acts, but it often lost money. Mr. Rossi had been saving up in hopes of buying a new space, but the pandemic ended that dream.

Legally, music venues in Iowa were allowed to reopen in June, but with social-distancing requirements that significantly reduced their capacity. Even if those rules were lifted, Mr. Rossi said, he couldn’t see a path toward reopening safely and profitably anytime soon. This month, he announced that Vaudeville Mews would be closing permanently.

“We couldn’t pay our rent, and it was piling up, and we were constantly still getting drained by internet bill, insurance bill, utility bill,” he said. “Who wants to go into huge debt to float a business that we don’t see any end in sight?”

Mr. Rossi’s nearby bar, the Lift, is officially still in business, but aside from a brief experiment with deliveries, it hasn’t served a drink since March. He has considered welcoming a small number of customers on a reservation-only basis, but so far hasn’t figured out how to reopen in a way that would both be safe and not cost him even more than staying closed.

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Credit…Kathryn Gamble for The New York Times
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Credit…Kathryn Gamble for The New York Times

“We felt it would be worse for us to reopen,” he said.

At Court Avenue Restaurant & Brewing Company, around the corner from Vaudeville Mews and the Lift, the lack of nightlife is taking a toll on business. So is the lack of the normal lunchtime crowd, with many office employees still working from home. Court Avenue reopened in May, but has regained just 30 to 40 percent of its pre-pandemic sales, according to the owner, Scott Carlson.

“Even if the governor said, ‘Hey, we’re taking away all restrictions and all mandates and all recommendations,’ our numbers wouldn’t change, not very dramatically,” he said.

Iowa has outperformed many other states economically during the pandemic, at least by some measures. The unemployment rate capped out at 11 percent in April — below the 14.7 percent hit by the country as a whole — and it has fallen quickly, to 4.7 percent in September.

But economists attribute Iowa’s success primarily to its favorable mix of industries. The state relies more heavily than most on agriculture and manufacturing, which were comparatively insulated from the virus.

Vulnerable industries like tourism, hospitality and retail sales are struggling in Iowa as they are everywhere else. Data compiled by researchers at Harvard and Brown Universities from private sources shows that consumer spending has rebounded more slowly in Iowa than in neighboring states.

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“Retailers are still having a tough go of it in Iowa,” said Ernie Goss, a Creighton University economist who studies Iowa and the Midwest. “You’re talking about individuals who regardless of regulations are not going back in a restaurant right now.”

Mike Draper owns a chain of T-shirt shops with three stores in Iowa and others in Omaha, Chicago and Kansas City, Mo. Customer traffic is down 30 to 50 percent in all of them, he said, with no consistent patterns based on the rules local governments have imposed.

“It has almost nothing to do with regulations,” Mr. Draper said. “It’s really driven by people’s mentality more than regulations.”

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Credit…Kathryn Gamble for The New York Times

There is little doubt that restrictions are restraining some economic activity, particularly in parts of the country that have strictly limited restaurant capacity and indoor gatherings. Local business owners say that restaurants are noticeably busier in Davenport, Iowa, than across the Mississippi River in Moline, Ill., where rules on mask-wearing and social distancing are stricter and more consistently enforced, although business is not back to normal on either side of the river.

But greater activity can also come with a cost, to both public health and the economy. When college campuses in Iowa reopened in August, students packed into bars and nightclubs — and coronavirus cases quickly began to rise. Governor Reynolds shut down bars in several college towns for more than a month.

For some workers, Iowa’s situation is the worst of both worlds: They are back at work, putting them at risk of contracting the virus, but don’t have enough customers to make a living.

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Credit…Kathryn Gamble for The New York Times
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Credit…Kathryn Gamble for The New York Times

Ms. Foote, 24, had worked at the beauty salon for just a few weeks when it shut down because of the pandemic. The job was the fulfillment of a longstanding dream — after years of juggling school and low-wage jobs, she was finally working full time and on track to get benefits.

Even so, when the salon reopened in the spring, she was scared to return to work. And once she did go back, there was little work for her.

“I just kind of sit around and don’t do anything,” she said. “People are scared to go into the salon and sit for an hour.”

Ms. Foote said she was taking home just $200 for each two-week pay period, meaning she again needs to supplement her income with part-time jobs. But she isn’t sure she should be rooting for business to pick up.

“I don’t see how me going to the salon more often and exposing myself is going to make things better,” she said. “I don’t think that’s safe, personally.”

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July Is the New January: More Companies Delay Return to the Office

When the coronavirus pandemic shuttered offices around the United States in March, many companies told their employees that it would be only a short hiatus away from headquarters.

Workers, they said, would be back in their cubicles within a matter of weeks. Weeks turned into September. Then September turned into January. And now, with the virus still surging in some parts of the country, a growing number of employers are delaying return-to-office dates once again, to the summer of 2021 at the earliest.

Google was one of the first to announce that July 2021 was its return-to-office date. Uber, Slack and Airbnb soon jumped on the bandwagon. In the past week, Microsoft, Target, Ford Motor and The New York Times said they, too, had postponed the return of in-person work to next summer and acknowledged the inevitable: The pandemic isn’t going away anytime soon.

“Let’s just bite the bullet,” said Joan Burke, the chief people officer of DocuSign in San Francisco. In August, her company, which manages electronic document signatures, decided it would allow its 5,200 employees to work from home until June 2021.

“We’re still in a place where this is evolving,” she said. “None of us have all the answers.”

Many more companies are expected to delay their return-to-office dates to keep workers safe. And workers said they were in no rush to go back, with 73 percent of U.S. employees fearing that being in their workplace could pose a risk to their personal health and safety, according to a study by Wakefield Research commissioned by Envoy, a workplace technology company.

More companies are also saying that they will institute permanent work-from-home policies so employees do not ever have to come into the office again.

In May, Facebook was one of the first to announce that it would allow many employees to work remotely even after the pandemic. Twitter, Coinbase and Shopify have also said they would do so. On Friday, Microsoft announced it would also be part of that shift.

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Credit…Stuart Isett for The New York Times

The elongating timelines and changing policies add up to a continued balancing act for companies as the coronavirus shatters work norms and upends assumptions about where workers need to be to achieve maximum productivity. Employers are also under pressure to be as open as possible about their intentions so that workers can plan ahead with their lives.

The postponement of return dates is a “psychological blow for those who expected this to be a transition phase,” said Tsedal Neeley, a Harvard Business School professor who studies remote work. “The reality is hitting that, ‘There won’t be a vaccine as I expected very quickly. This is going to be my life, and I’d better learn how to do this.’”

Dr. Neeley likened the situation to waiting at an airport terminal for a flight that is continually delayed. With the new dates announced, she said, people can finally start adjusting from a temporary “grinning and bear it” approach to a permanent shift.

Successful companies “have begun to think about long-term strategy rather than ‘Let’s just survive our crisis,’” she said.

Much of corporate America is now following the lead of Silicon Valley tech companies like Google and Facebook. They were among those that allowed employees to work from home even before the pandemic hit in full force in March. Since then, Facebook has set the tone in planning for permanent remote work, while Google established the July 2021 target date for returning to the office.

“I hope this will offer the flexibility you need to balance work with taking care of yourselves and your loved ones over the next 12 months,” Google’s chief executive, Sundar Pichai, wrote in an email to employees about the July 2021 date.

Other employers soon emulated the tech giants, also citing worker flexibility as a key factor in pushing their return-to-office dates to next summer.

Ms. Burke, the DocuSign executive, said announcing the June 2021 return date to employees prompted a “collective sigh of relief inside the company” because it put an end to the incremental postponements and uncertainty of when they would be expected to return.

Remote work has been productive, she said, and people like not having to commute. But a mix of in-person and remote is probably the most popular option for employees when life returns to normal, she said, because they also miss the social interaction of an office space.

Zoom “is not the same thing, and it’s exhausting,” Ms. Burke said. “By 7 o’clock last night, I was Zoomed out.”

Other companies that have delayed their returns to the office until next summer often face a more complicated decision because their work forces are not just made up of white-collar engineers, unlike those of internet companies.

Ford said last week that its decision to hold off on back in-person office work through June 2021 would apply to its roughly 32,000 employees in North America who are already working remotely. The company, which has about 188,000 employees, said the policy does not apply to factory staff.

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Credit…Aaron P/Bauer-Griffin, via Getty Images

When Target announced its decision to let some employees continue to work at home through June 2021 in a letter to staff last week, it said it would apply just to employees at its headquarters in Minneapolis. The company said a small number of employees who rely on the headquarters facilities would continue to work on-site. In-store employees will work in retail stores as usual.

Some companies that have already tried bringing employees back to the office have grappled with safety concerns. Last month, Goldman Sachs and JPMorgan Chase sent some workers back home after employees who had returned to the office tested positive for the virus.

Tech companies have also been at the forefront of permanent work-from-home policies because digital work is often simpler for people to conduct via laptops and teleconferences than by being on site.

Slack told employees — many of them engineers — in early August that its offices would remain closed until June 2021 and that it was considering permanent work-from-home, a decision partly driven by how productive its employees have been remotely, said Robby Kwok, the chief of staff to Slack’s chief executive.

“I do think this flexibility that employers are giving to employees about not needing to come into the office five days a week is going to be extremely beneficial for productivity, for engagement,” Mr. Kwok said.

Even when the pandemic subsides, 72 percent of Slack employees surveyed said, they preferred that the company allow a mix of at-home and office work. Slack operates a messaging platform used by many businesses.

Still, some tech companies have reservations about embracing permanent remote work and what might be lost in the process. Rapid7, a cybersecurity company in Boston, has told its more than 1,600 employees that they would continue to work from home through the beginning of 2021. But the company said it does its best work through in-person collaboration, and the pandemic has not changed that.

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Credit…Carlos Chavarría for The New York Times

“We know we are not meant to be 100 percent remote,” said Christina Luconi, the company’s chief people officer. “We will all go back to the office” when it is safe to do so, she said.

A push to all-company remote work can be particularly difficult for companies with predominantly young work forces, said Andy Eichfeld, the chief human resources and administrative officer at the credit card company Discover, which told employees on Sept. 29 that they would not need to return to the office before June 2021.

“A younger person needs apprenticeship in the first 10 or 15 years of their career,” Mr. Eichfeld said. “And we know how to deliver that in person. I’m not sure apprenticeship happens remotely.”

For some workers, the return date of next summer and the idea of permanent work from home is a mixed blessing.

When Colin Fahrion, a digital communications specialist for the University of California, San Francisco, found out in June that he would not need to return to the office until at least July 2021, he moved 15 miles farther away from San Francisco, from Richmond to Vallejo, about 30 miles outside the city, and bought a house.

Mr. Fahrion, 47, now has a dedicated office space and a backyard where his dog can play, and he has talked to his supervisor about working remotely on a permanent basis. Still, he finds Zoom meetings to be devoid of collaborative energy.

“I miss my co-workers,” he said.

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Jobs Report Shows Further Slowdown in U.S. Economic Recovery

Six months after the coronavirus pandemic tore a hole in the U.S. economy, the once-promising recovery is stalling, leaving millions out of work, and threatening to push millions more — particularly women — out of the labor force entirely.

The latest evidence came Friday, when the Labor Department reported that employers added 661,000 jobs in September, far fewer than forecasters expected.

It was the third straight month of slowing job growth, a worrying trend given the scale of the challenge ahead. The economy has nearly 11 million fewer jobs than it did before the pandemic, a bigger loss than the 8.7 million at the depth of the recession a decade ago.

Economists said the report underscored the need for more federal help. “It’s disturbing that we’re seeing such a dramatic slowdown in employment gains as we head into the fall,” said Diane Swonk, chief economist for the accounting firm Grant Thornton. “This is a red flag. We need aid now.”

The September slowdown was partly a result of public-sector job losses, particularly in school districts, where payrolls fell by more than 200,000. Economists said some of those jobs would come back if more schools opened for in-person instruction. But further cuts could be looming as state and local governments reel from a collapse in tax revenues.

The unemployment rate fell to 7.9 percent, down from a record high of nearly 15 percent in April. But even that good news carried a caveat: Nearly 700,000 people left the labor force, meaning they no longer counted as unemployed. And a rising share of the unemployed report that their job losses are permanent, rather than furloughs.


Unemployment rate



By Ella Koeze·Unemployment rates are seasonally adjusted.·Source: Bureau of Labor Statistics

The report was the last set of monthly jobs numbers — and one of the last major pieces of economic data — before the presidential election on Nov. 3.

Trump administration officials put a positive spin on the report. Larry Kudlow, the director of the National Economic Council, said on the Fox Business Network that analysts were misreading the numbers. “I think they are better than some people think,” he said. “The overall economy is looking good.”

It isn’t clear how much the economic data will matter to an election race upended by the news that President Trump tested positive for the coronavirus. But economists said recent data carried a clear message: Without a “Phase 4” spending package in Congress, the slowdown will only get worse.

“Everything depends on Phase 4 and whether we get that or not,” said Aneta Markowska, chief economist for the investment bank Jefferies. “There’s no middle ground.”

Prospects for a deal improved this week after seeming all but dead in September. House Speaker Nancy Pelosi on Friday floated the possibility that Mr. Trump’s coronavirus diagnosis could make an agreement more likely.

“This kind of changes the dynamic, because here they see the reality of what we have been saying all along: This is a vicious virus,” Ms. Pelosi said on MSNBC.

For small businesses in the industries hit hardest by the pandemic, the lack of federal assistance is an existential threat — and time is running out.

When the pandemic shut down movie theaters last spring, Cleveland Cinemas was able to stay afloat in part thanks to a loan under the Paycheck Protection Program. But that money is long gone. So are the cash savings that the company, which operated five theaters in the Cleveland area, had set aside to pay for new seating to help compete with big multiplexes.

Jon Forman, who has owned Cleveland Cinemas since 1977, isn’t sure what to do next. He has reopened only two of his theaters, and neither is attracting enough patrons to break even, even with fewer than 10 employees, down from 85 before the pandemic.

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Credit…Da’Shaunae Marisa for The New York Times
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Credit…Da’Shaunae Marisa for The New York Times

Many Americans remain wary of sitting indoors with strangers for two or three hours. And studios, hesitant to distribute big-budget movies when few people will pay to see them, have been delaying major releases until 2021.

Big chains may have the resources to wait for better days, but Mr. Forman isn’t sure he does. He has closed one theater permanently. Two others have been dark since March, and he is thinking about shutting the two reopened ones until demand picks up.

“We’re on a slope going down,” he said. “Without some sort of support, businesses are not going to survive.”

Stories like Mr. Forman’s reflect the mounting risks that as the crisis drags on, it will do lasting damage to the economy.

When unemployment spiked in March and April, most of the job losses were temporary layoffs or furloughs. But that is beginning to change. The number of people reporting they had been permanently let go rose to 3.8 million in September, nearly twice as many as at the height of the pandemic in April.


Job losses are more likely to be permanent than earlier in the pandemic

Share of jobs lost each month that are temporary layoffs



By Ella Koeze·Data is seasonally adjusted.·Source: Bureau of Labor Statistics

“The temporary layoffs in the beginning are turning more and more into permanent layoffs now as companies begin to see what their near future looks like,” said Erica Groshen, a Cornell University economist and the former head of the Bureau of Labor Statistics.

Prospects are particularly grim for those who lost their jobs in the first weeks of the crisis. More than 2.4 million people have been out of work for 27 weeks or more, the formal — if somewhat arbitrary — threshold for long-term joblessness. An even bigger wave is on the way: Nearly five million people have been out of work for 15 to 26 weeks.

Research has found that people who are out of work for six months or more have a harder time getting jobs even when the economy improves, and many end up leaving the work force. That can leave lasting scars on both workers and the broader economy.

Connie Sarmiento used to work three jobs to support her family as a single mother. She lost all of them in a matter of weeks: The Grand Hyatt in San Francisco, where she worked as a telephone operator, laid her off in March. The following month, she lost her jobs working at Oracle Park, the Giants’ baseball stadium, and Chase Center, home of the N.B.A.’s Golden State Warriors.

Initially, Ms. Sarmiento was able to make ends meet thanks to the $600 a week that the federal government added onto her $450-a-week unemployment payment from the state. But the supplemental benefits expired at the end of July, and she is falling behind on her bills.

Ms. Sarmiento’s $3,000 monthly rent was due Thursday, but she has only half the money she needs to pay it. “I have to tell my landlord that I am unable to pay,” she said. “I’m afraid he’s going to tell me I have to move out. That’s really scary.”

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Credit…Brandon Ruffin for The New York Times

Ms. Sarmiento hopes to return to work at the Hyatt this fall and at Oracle Park next season. But she worries about her prospects if those jobs don’t return.

“I feel hopeless,” she said. “Some of the only jobs I can find are in warehouses. I’m 60 years old and I don’t know if I can lift big, heavy stuff anymore. My body is getting weak.”

The September data carried particularly grim news about the pandemic’s impact on women. Initial job losses were concentrated among employers with heavily female work forces, like the hospitality and retail industries. While employment in those businesses has begun to bounce back, many women have been unable to return to work because they are disproportionately shouldering the burden of having children home from school.


Unemployment for women is worse than men’s across most demographics

Unemployment rates by race for men, women and over all


Black
Hispanic
Asian
White


By Ella Koeze·Rates are seasonally adjusted except those for Asian men and women.·Source: Bureau of Labor Statistics

The number of women working fell by 143,000 in September, and the share of women working or actively looking for work — a measure known as the labor force participation rate — dropped to 55.6 percent from 56.1 percent. Apart from April and May 2020, that is the lowest reading for women’s labor force participation since 1987.

Economists worry that the unexpected pause in their careers could prove to be a long-term setback for many women.

“We know that women leaving the work force to care for children for a while has lasting effects on their earnings, their seniority and their climb up the ladder,” said Julia Pollak, a labor economist with the career site ZipRecruiter. “Career interruptions have a huge effect.”

When schools and child care centers closed in March, Darsheen Sargent began bringing her 11-year-old daughter with her to her job as a home health aide in the Seattle area. During the day, she juggled two jobs at the same time — caring for her client, and running into the other room to help her daughter adjust to online schooling.

But Ms. Sargent, 48, grew increasingly concerned about the risk she posed to herself, her daughter, and her client by continuing to go to work each day. And she found balancing work and child care too much to handle. In mid-April, she decided to take a leave of absence from her job.

But the relief she felt at being able to focus purely on her daughter’s needs was quickly replaced by anxiety over keeping up with her bills now that she was no longer working. She has had to borrow money from friends to pay her rent, utilities and car payment.

As soon as schools and child care centers reopen, she plans to return to work. But she has no idea how long that will take.

“As a single parent, I’m the sole provider for my daughter, and I’m just doing the best I can to manage,” she said.

Jeanna Smialek, Alan Rappeport and Emily Cochrane contributed reporting.

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Strong Job Growth, a Terrible Job Market: The Bizarre 2020 Economy

In a normal time, a month in which employers added 661,000 jobs would represent an absolute blockbuster — the kind of thing an incumbent president could happily promote as evidence his policies were working.

These are, of course, not normal times. And the 661,000 positions employers added to their payrolls in September are paltry relative to the 22 million positions slashed in March and April, and relative to the seven-figure monthly job growth experienced from May through August.

If the rate of September job creation outlined by the Labor Department on Friday were to be sustained indefinitely, it would take another 17 months for the economy be back to its pre-pandemic levels of employment. That milestone would be reached in only eight months at August’s rate of job creation.

To make sense of where the economy stands on the verge of the election, it’s essential to keep a clear view of the distinction between three concepts: the level at which the economy is functioning, how fast it is improving, and whether that speed is accelerating or decelerating. And in a shambolic year, it’s not totally clear which of these concepts will matter most to voters, or how heavily the state of the economy will weigh on them at all.

The first is the equivalent to the level of the water in a bathtub; the second is whether it is filling up or being drained; the third is whether the spigot is being opened wider or closed. For the United States economy in the fall of 2020, the three measures are sending different signals:

The level of the bath water is very low. But it’s being filled rapidly. However, the spigot is being tightened so the pace at which the water is rising has slowed.

The level of economic activity is miserable. Seven months into the pandemic, most sectors of the economy are producing below — and in some cases far below — normal levels. The number of jobs on employers’ payrolls was 7 percent below February levels in September, a worse shortfall than at any point in the Great Recession. The share of the population working is only 56.6 percent, down from 61 percent a year ago and lower than it ever got during that downturn and its aftermath.

So if voters were to evaluate the Trump economy solely on how things are going as the fall of 2020 begins, it would be a harsh judgment.

If, by contrast, they were to look at the direction of the economy, things look quite good. Again, that 661,000 net jobs added — the job growth was particularly strong in health care and the retail sector — represents stronger job growth than in all but a handful of months in the modern record. Outside of this summer’s rebound, to find months of comparable improvement in the labor market, you have to go back to either a quirky month in 1983 or to the 1940s and 1950s.

So when the Trump administration points to a resurgent economy, it’s not untrue. But it’s incomplete. And that’s because of what’s happening to the rate of change.

After adding a remarkable 4.8 million jobs in June, as many companies reopened following the most intense phase of the coronavirus crisis, American employers have been slower to bring remaining workers back to their payrolls, with the number falling every month since.

The last few weeks have brought a wave of additional layoff announcements, including Disney’s plan to cut 28,000 theme park workers. Major airlines are poised to cut tens of thousands of jobs after the expiration of a provision requiring them to keep workers on their payrolls as a condition of bailout money.

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Pasta, Wine and Inflatable Pools: How Amazon Conquered Italy in the Pandemic

NAPLES, Italy — Ludovica Tomaciello had never shopped on Amazon before being trapped at her parents’ house in March during Italy’s coronavirus lockdown. Bored one afternoon scrolling TikTok, she spotted hair scrunchies that she then tracked down and ordered on Amazon.

When the package arrived, she was hooked. She soon signed up for Amazon Prime and turned to the site to buy a tapestry and neon lights to decorate her bedroom; halter tops, jeans and magenta Air Jordan sneakers; and a remote to wirelessly take selfies for Instagram.

“My mom was like, ‘Can you stop this?’” Ms. Tomaciello, 19, who is pursuing a language degree, said while at a cafe near her home in Avellino, about 20 miles east of Naples. When stores reopened in May, Amazon remained her preferred way to shop because of the convenience, selection and prices, she said. One friend even asked her to use it to discreetly order a pregnancy test.

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Credit…Gianni Cipriano for The New York Times

Amazon has been one of the biggest winners in the pandemic as people in its most established markets — the United States, Germany and Britain — have flocked to it to buy everything from toilet paper to board games. What has been less noticed is that people in countries that had traditionally resisted the e-commerce giant are now also falling into its grasp after retail stores shut down for months because of the coronavirus.

The shift has been particularly pronounced in Italy, which was one of the first countries hard hit by the virus. Italians have traditionally preferred to shop in stores and pay cash. But after the government imposed Europe’s first nationwide virus lockdown, Italians began buying items online in record numbers.

Even now, as Italy has done better than most places to turn the tide on the virus and people return to stores, the behavioral shift toward e-commerce has not halted. People are using Amazon to buy staples like wine and ham, as well as web cameras, printer cartridges and fitness bands. At one point, orders of inflatable swimming pools through the site were so backlogged that some customers complained.

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Credit…Gianni Cipriano for The New York Times

“The change is real, the change is deep, and the change is here to stay,” said David Parma, who has conducted surveys about shifting consumer behavior in Italy for Ipsos in Milan. “Amazon is the biggest winner.”

North America is Amazon’s largest market, accounting for about two-thirds of its $245.5 billion global consumer business. But the Seattle-based company has been targeting Europe and other new markets to grow.

Amazon entered Italy in 2010; its first sale in the country was a children’s book. But the company had only muted success over the next decade. Fewer than 40 percent of Italians shopped online last year, compared with 87 percent in Britain and 79 percent in Germany, according to Eurostat, a European Union government statistics group.

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Credit…Gianni Cipriano for The New York Times

Amazon was hampered in Italy by a lack of widespread broadband and poor roads for delivering packages, especially in the south. Italy has the oldest population in Europe, and many people are also wary of providing their financial details online. E-commerce accounts for only 8 percent of retail spending in the country.

“There were some structural issues that we had to face,” said Mariangela Marseglia, Amazon’s country manager for Italy. “Unfortunately, our country was and still is one of those where technological understanding and tech culture is low.”

The turning point was the pandemic. Mr. Parma said 75 percent of Italians shopped online during the lockdown. Total online sales are estimated to grow 26 percent to a record 22.7 billion euros this year, according to researchers from Polytechnic University of Milan. Netcomm, an Italian retail consortium, called it a “10-year evolutionary leap,” with more than two million Italians trying e-commerce for the first time between January and May.

Hurdles remain for Amazon. Small and midsize businesses are an integral part of Italian society. They make up roughly 67 percent of the economy, excluding finance, and about 78 percent of employment, which are higher than E.U. averages, according to E.U. statistics.

In Gragnano, a hilltop town near the Amalfi Coast with a 500-year history of pasta manufacturing, Ciro Moccia, the owner of La Fabbrica della Pasta, said Amazon was a “dangerous” monopoly that could destroy businesses like his that rely on conveying the quality of a product.

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Credit…Gianni Cipriano for The New York Times
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Credit…Gianni Cipriano for The New York Times

But during the lockdown, his company had no choice but to sell on Amazon after many stores shut. Standing above the family’s factory recently, where semolina flour was mixed with spring water and pressed into 140 different pasta shapes, Mr. Moccia said, “I am very worried.”

His son, Mario, 24, who tried for years to get his father to sell more online, said he saw it as an opportunity.

“If you are not on Amazon, you don’t have the same visibility,” he said.

Amazon’s success has drawn scrutiny. Unions have also criticized Amazon’s labor practices, including staging a multiday strike in March over virus-related safety policies. Italian regulators are investigating it for price gouging during the pandemic. In 2017, Amazon agreed to pay €100 million, or roughly $118 million, to settle a government tax dispute.

Ms. Marseglia said Amazon was “a lifeline for customers” in the pandemic and provided a new way for businesses to reach people online.

Amazon has rushed to keep up with demand. It plans to open two new fulfillment centers and seven delivery stations in Italy. It also is aiming to hire roughly 1,600 more people by the end of the year, pushing its full-time work force to 8,500 from fewer than 200 in 2011.

“We are accelerating the rhythm with which we make investments and hire new people,” said Ms. Marseglia, who is originally from Puglia in southern Italy.

With unemployment about 9 percent nationwide — and closer to 20 percent in areas of southern Italy — many are eager for Amazon to expand.

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Credit…Gianni Cipriano for The New York Times
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Credit…Gianni Cipriano for The New York Times

When Francesca Gemma graduated from college in 2016, Amazon was the only company hiring in her area. She now works at an Amazon fulfillment center picking hundreds of products from the shelves every hour so the goods can be shipped to customers.

“On the first day, the muscles of my legs felt like I had done a marathon — I couldn’t climb up the stairs,” she said. “It’s not for everyone, but it’s a job.”

Ms. Gemma, who is also a representative for Cgil, a national labor union, inside the center, said orders had skyrocketed during the lockdown and remained high. But she said that besides some bonuses she received at the peak of the emergency, Amazon did not provide warehouse staff much else to share in its success.

“Nothing remained for workers,” Ms. Gemma said, adding that her work has become more monotonous because of the enforcement of the sanitary protocols.

Amazon said it paid higher-than-average wages for warehouse work.

Amazon has made an effort to win over Italians. Parents are encouraged to shop on its website through a program that can steer a percentage of their purchases to their children’s school.

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Credit…Gianni Cipriano for The New York Times

In Calitri, a village of 4,000 people in southern Italy, Amazon sponsored a Christmas festival last year as part of a marketing campaign to show it could reach even the most isolated areas. It paid for a Christmas tree in the town square and provided gifts to children. The mayor hoped it would lead more artisans and farmers to sell through the site.

But Luciano Capossela, a jeweler in Calitri, helped organize a protest of the Christmas festival with other shop owners, who closed their stores for the night and blacked out their windows.

He has watched as the community has embraced Amazon. One customer recently texted him a screenshot of a wristwatch for sale on Amazon, asking if Mr. Capossela could match the price. When he said the Amazon price was lower than what he could get from a distributor, the customer never replied.

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Credit…Gianni Cipriano for The New York Times
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Credit…Gianni Cipriano for The New York Times

“If we keep going this way in 10 to 15 years, we will only have Amazon and everything else will no longer exist,” Mr. Capossela said. In an area where depopulation is so bad that some property is for sale for just 1 euro, he said last year’s protest was meant as a warning: “A village with couriers and without shops.”

He pulled up a picture on his phone taken the morning after the Amazon festival. It showed that the Christmas tree had blown over in a storm.

“It was God’s will,” he said.

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Unable to Pay Rent, Small Businesses Hope for a Deal With Their Landlord

In March, when the Boston restaurateur Garrett Harker and his partners shut down their seven restaurants after Massachusetts issued lockdown orders, Mr. Harker assumed the closures would be painful but temporary.

Six months later, three of Mr. Harker’s restaurants, including the flagship Eastern Standard — once described as the “perfect restaurant” by The Boston Globe’s food critic — remain shuttered. Mr. Harker and his landlord for those three restaurants are in a standoff: He can’t afford to pay the six-figure arrears he has accrued while his restaurants remain shut, and the landlord, he said, has refused to grant a deferral or discount.

“We’re probably going to lose money for another year to a year and a half,” Mr. Harker said. “It doesn’t work financially to reopen without a new lease.”

Similar sagas are playing out nationwide, as Main Street businesses — especially music clubs, gyms, restaurants, bars and others that were forced to close by the coronavirus pandemic — try to figure out how, or if, they can dig out of debt.

Nearly 98,000 businesses have closed permanently since the pandemic took hold, according to an analysis by Yelp. And the fate of many that remain open increasingly hinges on their ability to renegotiate their leases. A recent survey by Alignable, a social network for small-business owners, found that a quarter of those polled had fallen behind on their rent since the shutdowns began. For those in the fitness and beauty industries, the number rose to nearly 40 percent.

The problem may worsen now that an initial flood of federal aid has dried up and a sharply divided Congress has been unable to agree on further relief measures. The government’s $525 billion Paycheck Protection Program gave more than 5 million businesses a one-time cash injection to pay workers and other expenses, including rent, but most recipients have now spent the money.

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Credit…Cody O’Loughlin for The New York Times
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Credit…Cody O’Loughlin for The New York Times

“For 10 weeks, our revenue went to zero and stayed at zero,” said Rhonda Stark, the owner of three Orangetheory Fitness gyms in Ohio that were shut down from mid-March until late May. Ms. Stark’s collective rent bill, her largest fixed expense, tops $32,000 a month. She hasn’t paid it in full since March. Although she got P.P.P. loans ranging from $45,000 to $75,000 for each of her gyms, most of it went toward payroll, as the loan rules required. Ms. Stark’s gyms have reopened at a reduced capacity, cutting her sales by about 30 percent. To stay open, she needs to strike new deals with her landlords.

Retail rent collections plunged in April to just 54 percent of the total owed, according to Datex Property Solutions, a software company that tracks data on thousands of its clients’ retail properties nationwide. By August, collections had rebounded to nearly 80 percent, but some tenants, like movie theaters, clothing retailers, hair salons and gyms, were much further behind.

“When tenants can’t pay the rent, it imperils landlords’ ability to pay their own overhead and their loans, and the whole thing cascades,” Mark Sigal, chief executive of Datex, said.

For both sides, it’s a complicated dance. Property owners have their own expenses to pay, including taxes, insurance, mortgage or debt payments, and maintenance bills. Buildings owned by real estate investment trusts or Wall Street bondholders have complex management structures and governing covenants that can limit the property manager’s ability to make a deal.

Lance Osborne, the president of Osborne Capital Group, owns a retail plaza in Copley, Ohio, that houses four businesses, including one of Ms. Stark’s gyms. His company has around 150 retail tenants, and he estimates that half have sought rent relief or other concessions.

“Every one has to be handled on a case-by-case basis — no two tenant cases are the same,” Mr. Osborne said. “We’ve always dealt in good faith to try to keep the tenants open and operating. It’s always worth keeping someone, but it has to be an equitable deal.”

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Credit…Cody O’Loughlin for The New York Times

Eight of his tenants have declared bankruptcy or are on the brink, Mr. Osborne said. He has sued one business — which he described as open and thriving — for nonpayment. For others, he’s gradually negotiating new deals.

Many of those arrangements are informal and fragile. Ms. Stark said she hasn’t signed anything establishing new terms for any of her gyms, which means her landlords could at any time declare her in default and crack down. But so far, each has been willing to take it month by month, collecting some rent and verbally assuring her that they’ll keep working with her.

“It’s very tentative,” Ms. Stark said. “You call them up, you talk to them about what’s going on — I’ve sent screenshots of my numbers so they can see where we stand.”

Ken Giddon, a co-owner of the men’s wear store Rothmans, held off on reopening his flagship store in Manhattan until he nailed down a new lease. The shop hadn’t paid its landlord, ABS Partners Real Estate, since April, and Mr. Giddon didn’t want to bring back his staff and restock inventory if he couldn’t reduce his rent.

Last week, he finalized a new arrangement that involved lowering his base rent and giving ABS a variable payment based on his sales. Such arrangements are common in some industries, especially restaurants, but it was new for Rothmans.

“This is a very handcrafted deal,” said Mr. Giddon, who now plans to reopen next month. “We’ll probably be operating at a third of our previous volume for the next six to 12 months. This arrangement gives us flexibility.”

Gregg Schenker, the president of ABS, said both sides had an incentive to figure out a deal that would keep the business alive. Rothmans, which Mr. Giddon’s grandfather started in 1926, has been an ABS tenant for decades, and Mr. Schenker, who shops there, described it as the kind of unique, multigenerational retailer that he hopes will continue to thrive in New York City.

But not all landlords are willing, or able, to take a haircut. Oren Molovinsky closed his restaurant Farmboy, in Chandler, Ariz., in mid-July for what he intended to be a short break. He hadn’t paid his full rent for months, but he had reached out to his landlord, the Falls Investors, hoping to discuss options. Instead, he got a letter in late July telling him payment in full was due in five days. When he missed that deadline, his landlord locked him out.

“We were surprised they wouldn’t respond to us at all — my attorney didn’t even get a response,” Mr. Molovinsky said.

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Credit…Courtney Pedroza for The New York Times
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Credit…Courtney Pedroza for The New York Times

The Falls Investors sued Mr. Molovinsky last month in an Arizona state court, seeking at least $110,000 for what the complaint said was unpaid rent. Mr. Molovinsky has told his staff and customers that Farmboy, which sold sandwiches and salads using locally sourced ingredients, will not reopen. (A lawyer for the Falls Investors said the landlord has done workouts with other tenants but chose not to for Mr. Molovinsky because he was already behind on his rent before the pandemic. Mr. Molovinsky, who acknowledged his arrears, said he had a verbal agreement on a repayment plan with one of the group’s principals, who died last year.)

Mr. Harker fears that Eastern Standard — his first restaurant, and the only one of his ventures that he owns outright — will soon join that list.

The brasserie opened 15 years ago and quickly gained a reputation as one of Boston’s best spots for relaxed hospitality and cocktails. It sits in a retail space within the Hotel Commonwealth that has changed hands twice since Eastern Standard opened. The current owner, UrbanMeritage, promotes Mr. Harker’s “award winning restaurants” and the foot traffic they bring to the area in a brochure it created to to advertise a nearby vacant storefront.

But Mr. Harker said he could not afford to reopen unless UrbanMeritage renegotiated his lease, which has a bit more than two years left on it. He has $1.6 million in P.P.P. loans for Eastern Standard and the two other shuttered restaurants — the Hawthorne and the Island Creek Oyster Bar — sitting untouched in a bank account. He plans to return the loans soon if he can’t make a deal.

Michael T. Jammen, a principal of UrbanMeritage, disputed Mr. Harker’s claim that his company was unwilling to negotiate, saying via email that they have “offered multiple discount opportunities both on his existing lease and on a lease renewal” in recent years. Those discussions have continued during the pandemic, Mr. Jammen said.

Mr. Harker has worked out arrangements with his four other landlords, including Young Park, the president of Berkeley Investments. Berkeley owns the building housing the Boston location of Row 34, Mr. Harker’s seafood-and-burgers spot. Mr. Park agreed to slash Row 34’s base rent in return for a higher percentage of its sales.

“We did not want them to leave,” he said. “I think most developers are weighing the benefit of sustaining a business that is showing no revenue for an extended period of time versus the challenge of attracting another operation with the credibility, track record and management skills to run a successful business. That’s not so easy to find.”

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Is This the End of the New York Yoga Studio?

On an afternoon in late July, Amy Quinn Suplina met two of her longtime employees in an airy street-front room in Park Slope, Brooklyn, to box up her 12-year-old business. Sitting on balance balls to deflate them, the three reminisced while arranging straps, blankets and bolsters for storage.

Since opening Bend & Bloom Yoga in a 1920s firehouse on a residential block in 2008, she had turned it into neighborhood fixture, providing an oasis for yogis of all levels in a striving, strident city.

But the pandemic brought all that to a halt. And after five months paying rent, utilities, and other expenses for a space she couldn’t use, Ms. Suplina decided to forfeit her security deposit and get out.

She isn’t alone. Packed indoor classes focusing on breath, touch and togetherness are not exactly happening these days. In response, yogis have embraced virtual instruction, leaving New York’s physical studios struggling for relevance. Since March, dozens of them have permanently closed, from major corporate chains to independent shops.

Many owners say the pandemic was the final straw for an increasingly untenable business, where even crowded classes could no longer cover astronomical rents. Some studios and teachers are trying to recreate themselves as online brands but face an already saturated market, where celebrity YouTube instructors have millions of followers.

Some well-known yoga instructors dominate the online market. Adriene Mishler’s YouTube channel has more than eight million subscribers.

“It’s a really hard time, and communities need yoga and mindfulness practices more than ever,” said Ms. Suplina, who was inspired to open Bend & Bloom after relocating from Washington, D.C., where a studio she attended had given her a sense of belonging. As the lingering pandemic strains New Yorkers mentally and spiritually, physical spaces offering them this kind of sanctuary may become harder to find.

Public assistance programs have been little help to studio owners, most of whom hire teachers as independent contractors rather than employees. This means that studios could not use funds from the federal Paycheck Protection Program to cover their payrolls. Ms. Suplina said she received only a small loan for her administrative staff.

And unlike other businesses that were eventually given dates for reopening, yoga studios and other fitness centers were left out of New York’s plans for months. Last month, when Gov. Andrew M. Cuomo issued 17 pages of guidelines for gyms to incorporate before reopening, Mayor Bill de Blasio excluded group classes. Martin Kerestes, who has run two yoga studios in Queens with his wife since 2003, said there was “no light at the end of the tunnel.”

But many owners say the coronavirus outbreak merely exacerbated a deeper problem, the imbalance between revenue and rent. A few older studios, like Integral Yoga Institute on West 13th Street, own their own buildings and are less exposed to the rising price of real estate. But most studios rent their spaces and are in competition with ventures that can more easily guarantee, say, $20,000 a month. The pandemic merely pushed Ms. Suplina out of her space a few months early; her landlord intended to sell the building to a condominium developer at the end of the year.

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Credit…Hilary Swift for The New York Times

Add that to an overdue reckoning with inappropriate touching and abuse at a few well-known establishments that left some students leery of in-person classes, as well as disruptive platforms like ClassPass, and it’s easy to understand why yoga studios were starting to disappear well before the coronavirus outbreak. But the health requirements necessitated by the pandemic — including physical distancing, especially indoors — have robbed studios of their lifeblood: rooms full of people.

“Our business depended on volume to survive, and now if we say instead of putting 50 people in a room the most we can put is 10 to 12, there’s just no viable way for the model to work,” said Michael Patton, who left a job on Wall Street during the 2008 financial crisis to start Yoga Vida, which had four locations in the city.

Before the coronavirus outbreak, Mr. Patton was paying around $95,000 in monthly rent. He has since broken all his leases and is riding out the pandemic in an empty rural retreat he was developing upstate near New Paltz, for which he is now seeking a partner or a buyer.

“The bigger you are, the bigger the problems,” said Brian Cooper, the chief executive of YogaWorks, a national chain that permanently closed all of its New York City locations in April and is now offering online classes.

The pandemic has been equally tough on smaller studios. Nueva Alma, which Erica Garcia opened on the northern edge of the Bronx in 2012, would have been limited to seven students under physical distancing guidelines. So Ms. Garcia locked the doors for the last time on June 1 and is now teaching Zoom classes. “I’m not in it for the money, but I’m not in it to lose money, either,” she said.

Yoga requires only a clear mind and a few square feet of space, so it is easily converted to remote instruction. But it’s all about community, and seeing the light in others, which can be hard to do through screens.

The disappearance of physical studios means fewer places for “satsang,” a Sanskrit term for sacred gathering spaces, said Sharon Gannon, who co-founded one of the city’s most venerable studios, Jivamukti Yoga, and ran it for 30 years before closing it in 2017. “But yoga practice itself makes one self-reliant,” she continued. “Yogis are good at adapting to change.”

The data bear this out. According to Mindbody, a booking software company for the wellness industry, its active users quickly embraced online yoga. Last year, one in five users said they had taken streamed or prerecorded classes, but by this June, more than four of five said they were doing so.

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Credit…Kevin Bigger

Studios that once resisted virtual instruction are now embracing it. For the first time in its nearly 60-year history, the city’s oldest yoga school, Sivananda Yoga Vedanta Center on West 24th Street, is offering online classes. “One way or another, we will make sure the teachings of yoga are available to those who want them,” said Neeti Bhatia, the studio’s manager.

Meanwhile, teachers who have lost their studio gigs are breaking out on their own. Before the pandemic, Kevin Bigger crisscrossed the city to teach at nine different studios and for a handful of private clients. Now all but two of his former employers have furloughed him or gone out of business, so he has begun teaching online.

The transition required a hefty investment: Mr. Bigger bought a camera, lights and monitors. It has also been a bit awkward to convert his railroad-style Brooklyn apartment into a sacred space. “In order to teach a live class right now, I have to move half the furniture in my living room and lock the boyfriend in our bedroom and ask him to be quiet the whole time,” he said.

But there are benefits. He is saving time by not commuting and now keeps nearly 80 percent of the revenue, whereas he usually took home less than 30 percent working for studios. Former students who had moved away have returned to the fold. And because he knows his clientele, he can charge them on a sliding scale, he said. “My unemployed students get discount codes, and the investment bankers don’t.”

Sherman Morris, an instructor whose arduous classes at YogaWorks stretched to nearly two hours and attracted a committed following, said teaching online was “the antithesis” of his former practice. But his loyal students have followed him to Zoom. He recalled one, a surgical nurse, who logged in from a tent in the middle of a desert in Afghanistan. “It was priceless,” he said. “How could I not continue with this?”

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Credit…Hilary Swift for The New York Times

Since many teachers are cutting out the middleman as they organize their own classes and build personal brands, studio affiliations also seem to be losing their cachet.

Adrianna Naomi, who moved to the city from Puerto Rico in 2013, said she was grateful when she found a stable job as a manager of the Flatiron location of CorePower Yoga, a chain. So when Ms. Naomi, 30, was laid off early in the pandemic, she worried about losing her salary and the community she had fostered there. Since then, she and other “instructors have had to take matters into their own hands,” she said.

In late July she began teaching on Zoom six times a week. And on Sunday mornings, Ms. Naomi runs an in-person class on the rooftop of her Williamsburg apartment building, often having to clear beer bottles left by neighbors the night before. She caps the class at 10 students and charges $15. Everyone must undergo a temperature check, sign a health waiver and wear a mask. Overwhelmed by demand, she added a second rooftop class on Monday nights, but she doesn’t know how long she can continue once the weather turns colder.

Although Ms. Naomi’s new schedule hasn’t made up for her lost salary, it has kept her afloat. But marketing herself on social media requires constant hustle. Now, instead of competing with other neighborhood instructors for students, she is doing so with yogis around the globe. “You open up Instagram at any time of day and there’s somebody doing a free class,” Ms. Naomi said.

Ms. Naomi has also focused on her social media game since losing her job with a yoga studio.

Some teachers are trying to build their online followings through strength in numbers. Mr. Bigger and three other instructors recently launched Single Point Yoga, a website that bundles their classes together, sort of as a studio would have done in the past.

Ms. Suplina has not given up on the old model. She continues to employ about half of Bend & Bloom’s teaching staff for online and outdoor classes while she figures out her next move. The intimacy and reverence that occur in a studio are essential, she said. “It’s another expression of church,” she explained. “The reason we teach yoga is that alchemy of having bodies together breathing and moving in a room, and seeing people, and connecting and sharing that experience.”

She plans to open a new physical space as soon as she can.

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Americans Keep Spending, but Growth of Retail Sales Slows

Despite an end to the federal stimulus measures that have propped up consumer spending, retail sales climbed for the fourth straight month in August, extending a bounceback that has lasted longer than many economists had expected.

The gains, however, were smaller than in previous months, which some economists warned could be a sign that the retail recovery was running out of steam.

Retail sales rose 0.6 percent last month, the Commerce Department reported on Wednesday, and the 1.2 percent increase in July was revised down to a 0.9 percent gain. Still, Americans continued to spend on home computers, new cars and online groceries, and some retailers serving those pandemic-related needs reported record sales.

“The easy gains of reopening are behind us, and the down-side risk of slower growth is emerging,” said Scott Anderson, an economist at the Bank of the West.




August

$600

billion

+0.6%

from July

Monthly retail sales

500

400

300

200

100

RECESSION

0

’06

’08

’10

’12

’14

’16

’18

’20

$600

billion

Monthly retail sales

500

August

+0.6%

from July

400

300

200

100

RECESSION

0

’06

’08

’10

’12

’14

’16

’18

’20


Seasonally adjusted advance monthly sales for retail and food services.

Source: Commerce Department

By Karl Russell

The slower rise in consumer spending in August occurred against a grim economic backdrop that grew even darker as the $600-a-week supplemental unemployment assistance expired and Congress failed to agree on new stimulus measures. Unemployment declined, but stayed high as huge sectors of the economy — like hospitality, food service and travel — remain largely shut down.

The slight monthly sales increase — many economists had been predicting a higher number — showed just how vital that government assistance has been in raising incomes. The latest sales data is likely to amplify calls for Congress to pass another round of stimulus before the November election.

“I think it will be much more difficult to see these gains going forward given that unemployment benefits have expired,” said Gus Faucher, chief economist at the PNC Financial Services Group.

Still, the level of spending over the past four months has surprised some experts, even when factoring in Americans’ seemingly unwavering propensity to shop.

“It’s extraordinary that retail sales remained resilient in August,” Morgan Stanley economists wrote in a research note this month.

There were a few factors that likely converged, including stock market gains that increased purchases among wealthy spenders and money that people in the lower-income bracket had been saving from their $600 weekly assistance, which ended on July 31.

The recovery continued to be strong for some retailers, while others have struggled, casting national chains into buckets of pandemic winners and losers.

Most apparel chains and department stores have seen sales tumble during the pandemic. In the past six weeks, Lord & Taylor and Century 21, a staple of bargain apparel shopping in New York, joined the growing list of retailers that have filed for bankruptcy in recent months. Both plan to liquidate.

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Credit…Karsten Moran for The New York Times

Yet, chains like Best Buy, Dick’s Sporting Goods and West Elm have reported revenue jumps this summer, with many Americans spending more on goods that they could use at home or while socially distancing outdoors. Dick’s reported a record quarter last month, fueled by outdoor activities like golf, camping and running.

“When you look at the numbers, it was V-shaped,” Sucharita Kodali, a retail analyst at Forrester Research, said of the recovery. “It was just extremely poorly distributed across different sectors.”

While categories like clothing stores and restaurants and bars posted increases in August, they were still down from where they were a year earlier: clothing by 20 percent, and restaurants and bars by 15. Conversely, grocery store sales declined 1.6 percent in August, but were 9 percent higher from a year earlier. Furniture and home furnishing stores posted a 2 percent increase in August and were up 3.8 percent from a year ago.

Back-to-school shopping — which normally takes place in August and September — was likely diminished this year, as families navigated remote learning plans and spent less on new apparel and backpacks for their children.

Michael Gapen, an economist at Barclays, has been surprised by how much spending has migrated from one sector of the economy to another. Instead of going to restaurants, people bought more groceries and liquor. They took on home improvement projects or bought new cars instead of spending that money on travel.

Mr. Gapen attributes this shift partly to resilient consumers, but also to businesses that have found a way to deliver goods to people’s homes.

“It’s the Amazonification of the world that has facilitated this,” he said. “If this pandemic hit 10 to 15 years ago, I am not sure we would have been able to make this shift. It reflects how nimble certain businesses have become.”

When the pandemic closed offices, hotels and restaurants across New York this spring, Baldor, a food service company supplying these industries, was in trouble.

Nearly 90 percent of its revenue was gone and the company had $10 million worth of food inventory and very few customers. The company, based in the Bronx with about 2,000 employees and 400 trucks, quickly figured out how to pivot and start delivering food to people’s homes instead.

“It was a matter of life or death, to be honest,” said Ben Walker, vice president of sales and marketing at Baldor.

Mr. Walker said the key to the company’s ability to adapt was that it modernized its online presence a few years ago, allowing restaurants and other food service customers to pay with credit cards. The website, which features high-quality photos of fresh food, allowed Baldor to transition relatively smoothly to retail customers during the pandemic.

Still, the company’s adaptation is not a complete replacement for its old business. Sales are still down about 25 to 30 percent from before the pandemic. Even though restaurants are coming back, hotels and office cafeterias are still largely closed. Some may never reopen.

“We are in this for restaurants and hotels,” Mr. Walker said. “That is what we are built for.”

Economists say the full impact of these types of closings in the consumer economy may not be felt for several months, when the aftereffects of the stimulus measures wear off. The first to pull back on spending will be the unemployed. But even those with jobs may start to lose confidence in the economy and stop buying as much.

Mr. Anderson, of the Bank of the West, said many consumers, who have kept making big purchases and renovating their homes, may not have fully realized the economy’s fragility, but they inevitably will.

“I think there is a bit of deer-in-the-headlights phenomenon,” Mr. Anderson said. “People are having trouble wrapping their minds around the extent of the economic losses.”

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The Service Economy Meltdown

March 16 was the last day David Engelsman walked into the Jackrabbit, an acclaimed restaurant at the boutique Duniway Hotel in downtown Portland, Ore. The lead server on morning duty, Mr. Engelsman was told before his shift started that his job was no longer needed. He left early, at 10:30 a.m. The restaurant didn’t reopen the next day.

A total of 330 workers at the Duniway and another Hilton property across the street have been let go since then. With two autistic children, a wife with a severe heart condition and now no health insurance, Mr. Engelsman has devoted much of his time to the fight by his union, UNITE HERE, to get Hilton to make health-plan contributions for laid-off workers until the end of the year. “We’re left standing here with nothing,” he said. “I know I sound dramatic, but it is dramatic.”

With 11.5 million jobs lost since February and the government’s monthly report Friday showing a slowdown in hiring, stories like this have become painfully common. When companies dispatched office staff to work remotely from home, cut business trips and canceled business lunches, they also eliminated the jobs cleaning their offices and hotel rooms, driving them around town and serving them meals.

For this army of service workers across urban America, the pandemic risks becoming more than a short-term economic shock. If white-collar America doesn’t return to the office, service workers will be left with nobody to serve.

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Credit…Sergio Flores for The New York Times
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Credit…Chona Kasinger for The New York Times
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Credit…Ysa Pérez for The New York Times

The worry is particularly acute in cities, which for decades have sustained tens of millions of jobs for workers without a college education. Now remote work is adding to other pressures that have stunted opportunities. The collapse of retailers like J.C. Penney and Neiman Marcus has wiped out many low-wage jobs. The implosion of tourism in cities like New York and San Francisco will end many more.

Maria Valdez, a laid-off housekeeper at the Grand Hyatt in San Antonio, is scraping by with three children on a $314 weekly unemployment check. Kimber Adams, who lost her job as a bartender at the Seattle-Tacoma International Airport, is pinning hopes on her “Plan B” to become a phlebotomist. Waldo Cabrera, let go from his job cleaning the cabins of American Airlines jets at the Miami airport, hopes an offer to drive a tanker truck in Texas will wait until he can move at the end of the year. “Perforce I have to leave here,” he said.

Mari Duncan is relatively lucky. She is still drawing a paycheck, even though her job marinating meats and cooking soup at Facebook’s Seattle campus ended when Facebook sent its managers and engineers to work from home. But she fears that her deal — Facebook is still paying its food service contractor so it can cover payroll — can’t last forever. “When I saw a story break about how Facebook will stay remote until July of 2021,” she said, “I freaked out a little bit.”

Every one of them is itching to get back to work. But a fear is budding that even when the pandemic has passed, the economy may not provide the jobs it once did.

“Some law firms are finding that it is more productive for their lawyers to stay at home,” said Kristinia Bellamy, a janitor who was laid off from her job cleaning offices at a high-rise housing legal firms and other white-collar businesses in Midtown Manhattan. “This might be the beginning of the end for these commercial office buildings.”

Consider Nike’s decision in the spring to allow most employees at its headquarters in the Portland area to work remotely. Aramark, which runs the cafeteria and catering at Nike, furloughed many of its workers. With no need for full services anticipated “for an undefined period,” Aramark says, 378 employees — waiters, cooks, cashiers and others — now face permanent layoff on Sept. 25.

The question is whether dislocations like this will be only temporary. About one-fifth of adults of working age who do not have a college degree live in the biggest metropolitan areas — in the top quarter by population density — according to estimates by David Autor of the Massachusetts Institute of Technology. Most are in service industries that cater to the needs of an affluent class of “knowledge workers” who have flocked to cities in search of cool amenities and high pay.

And having discovered Zoom, what company will fly a manager across the country for a day’s worth of meetings? A lasting reduction in business travel will endanger the ecosystem of hotel and restaurant workers serving corporate travelers.

Jonathan Dingel and Brent Neiman of the University of Chicago have calculated that 37 percent of jobs can be done entirely from home. Those jobs tend to be highly paid, in fields like legal services, computer programming and financial services. And they tend to concentrate in affluent areas like San Francisco; Stamford, Conn.; and Raleigh, N.C.

Recent research by the economists Edward Glaeser, Caitlin Gorback and Stephen Redding found that when Covid-19 struck, activity — measured by the movement of cellphones in and out of ZIP codes — declined much more sharply in neighborhoods where a larger share of residents had jobs that could potentially be done from home.




Ability to work from home

26%

Share of jobs

32

34

36

38

43

Seattle

Portland

Boston

Minneapolis

Buffalo

Detroit

N.Y.

Chicago

Omaha

Cleveland

San Fran.

Phila.

Indianapolis

Denver

San Jose

Wash.

Kansas City

Cincinnati

Las Vegas

St. Louis

Wichita

Nashville

Albuquerque

Raleigh

Los Angeles

Okla.City

Memphis

National Bureau of Economic Research

Phoenix

Atlanta

Dallas

El Paso

Jacksonville

Austin

New Orleans

Honolulu

Anchorage

Tampa

Miami

Ability to work from home

26%

Share of jobs

32

34

36

38

43

Seattle

Portland

Boston

Minneapolis

Buffalo

Milwaukee

Detroit

New York

Pittsburgh

Cleveland

Chicago

Philadelphia

Omaha

San Francisco

Baltimore

Indianapolis

Cincinnati

Washington

San Jose

Kansas City

Denver

Wichita

St. Louis

Las Vegas

Louisville

Raleigh

Nashville

Los Angeles

Charlotte

Albuquerque

Memphis

San Diego

Phoenix

Oklahoma City

Atlanta

Tucson

Dallas

El Paso

Austin

New Orleans

Jacksonville

Houston

Tampa

San Antonio

Anchorage

Honolulu

Miami

Ability to work from home

Share of jobs

26%

32

34

36

38

43

Seattle

Portland

Boston

Minneapolis

Buffalo

Milwaukee

Detroit

New York

Chicago

Cleveland

Pittsburgh

Philadelphia

Omaha

Baltimore

Columbus

San Francisco

Indianapolis

Washington

Cincinnati

Denver

San Jose

Kansas City

St. Louis

Louisville

Las Vegas

Wichita

Raleigh

Nashville

Los Angeles

Charlotte

Albuquerque

Memphis

Oklahoma City

San Diego

Phoenix

Atlanta

Tucson

Dallas

El Paso

Jacksonville

Austin

New Orleans

Houston

Tampa

San Antonio

Honolulu

Anchorage

Miami


Source: Edward Glaeser, Harvard University; Caitlin Gorback, National Bureau of Economic Research; and Stephen Redding, Princeton University

By Karl Russell

The economists at Opportunity Insights in Cambridge, Mass., estimate that in the year to Aug. 9, consumer spending in high-income ZIP codes declined 8.4 percent, with the impact felt disproportionately by industries that rely heavily on the nation’s low-wage labor force: restaurants and hotels, entertainment and recreation services.




Ability to work from home in metropolitan areas

compared to change in jobs there

+30

%

ALL WORKERS

+20

+10

Change

in jobs

0

–10

–20

Trend line

–30

–40

20%

30

40

50

Share of jobs that can be done from home

+30

%

RETAIL WORKERS

+20

+10

0

–10

–20

–30

–40

20%

30

40

50

LEISURE AND

HOSPITALITY WORKERS

+30

%

+20

+10

0

–10

–20

–30

–40

20%

30

40

50

Ability to work from home in metropolitan areas compared to change in jobs there

LEISURE AND

HOSPITALITY WORKERS

ALL WORKERS

RETAIL WORKERS

+30

%

+20

+10

Change

in jobs

0

–10

–20

Trend line

–30

–40

20%

30

40

50

Share of jobs that can

be done from home

Ability to work from home in metropolitan areas compared to change in jobs there

ALL WORKERS

RETAIL WORKERS

LEISURE AND HOSPITALITY WORKERS

+30

%

+20

+10

Change

in jobs

0

–10

–20

Trend line

–30

–40

20%

30

40

50

Share of jobs that can

be done from home


Sources: Jonathan Dingel and Brent Neiman, University of Chicago; Bureau of Labor Statistics

By Karl Russell

A lasting change in the behavior of the high-wage layer atop urban labor markets would have an outsize effect. Many service jobs that held on in the face of globalization and widespread automation may not survive.

“I don’t know what a less-skilled worker does in West Virginia,” said Mr. Glaeser, an urban economist at Harvard University. “If urban service jobs disappear, the whole of America becomes like West Virginia.”

Nike isn’t Portland’s biggest private employer. That’s Intel, the semiconductor giant, which employs 20,000 mostly well-paid people there. It is a pillar of a high-tech cluster known as the Silicon Forest stretching between Hillsboro and Beaverton on the western edge of the city. And it supports a network of contractors and subcontractors whose income trickles down through the area’s economy.

Only about 40 percent of Intel’s employees are working on site — those indispensable to its vast chip-making plants — and remote work is set to continue until at least next June. Even after that, said Darcy Ortiz, Intel’s vice president for corporate services, “there will be more flexibility in the way we work.”

For businesses that rely on Intel’s footprint, that may not be great news. “Intel has sustained us,” said Rick Van Beveren, a member of the Hillsboro City Council who owns a cafe and a catering business that remain mostly shuttered. “We cater to a constellation of businesses around Intel.”

The same type of decision is being made around the country. Scott Rechler, chief executive of RXR Realty, which owns over 20 million square feet of office space in New York City, estimates that every office worker sustains five service jobs, from the shoeshine booth to the coffee shop. Yet only about 12 percent of his tenants are in the office.

Image

Credit…Chona Kasinger for The New York Times
Image

Credit…September Dawn Bottoms/The New York Times
Image

Credit…Hannah Yoon for The New York Times

Restaurant Associates — the food-service conglomerate operating cafeterias at companies including Google and The New York Times, and restaurants at the Smithsonian and the Quadrangle Club of the University of Chicago — employed 10,500 workers before the pandemic. Though the company has been scrambling for new business since then — to feed health workers, or to make home-delivered meals — Dick Cattani, the chief executive, said that only some half of them are working today.

Of course, a lot of the urban economy that employs low-wage service workers was shut down by city and state governments hoping to contain the pandemic. The risk of infection is also keeping many people at home. Presumably these fears and restrictions will relax once a vaccine or a treatment for Covid-19 is developed.

In New York, for instance, Amazon, Facebook and Google expect to add thousands more workers in the city. “It will take time to recover,” Mr. Rechler said. “Many small businesses may not survive. There will be some urban flight. But that will be backfilled by the next young bright cohort of people who want to come to New York.”

Mr. Cattani sees this as an opportunity to buy new businesses. And the company is expanding into hospitals, to feed patients and their visitors. “Covid can’t change the underlying energy of creative workers in a single place,” said John Alschuler, chairman of the real estate advisory firm HR&A Advisors.

A large share of the American labor force hopes he is right. Mr. Engelsman, the restaurant server in Portland, has no idea how he will pay for his wife’s medication when a month’s dose of beta blockers alone costs $580. Mr. Cabrera, the American Airlines cabin cleaner in Miami, had to dip into the insurance money he got after somebody crashed into his car, and is now carless. Ms. Valdez, the hotel housekeeper in San Antonio, was called back for the Grand Hyatt’s reopening this month, but says she can’t return until school starts because she must care for her 11-year-old son. She worries that Hyatt will try to make do with fewer cleaning workers and not hire everybody back.

Angel Carter, who was laid off in March from her job cleaning three floors in Philadelphia’s Center City, notes that janitors at work are putting their health at risk. They are more important than ever — given the pandemic — because offices must be cleaned extra thoroughly. She argues that the job these days merits hazard pay. But above anything else, Ms. Carter said, “I’m praying that they do open back up.”

Posted on

Unemployment Claims Show Layoffs Continue to Batter Economy

More than five months after the coronavirus pandemic began throttling the economy, layoffs remain widespread, the government reported Thursday, the latest sign of the labor market’s painstakingly slow recovery.

Last week, 833,000 workers filed new claims for state unemployment benefits, while 759,000 new claims were filed by freelancers, part-time workers and others under a federal program called Pandemic Unemployment Assistance. Both figures, which are not seasonally adjusted, were increases from the previous week.

“It’s pretty bad at this stage in the crisis,” said Gregory Daco, chief U.S. economist at the forecasting firm Oxford Economics. “I feel like this is a very fragile labor market at a critical juncture.”

There has been progress from the early days of the pandemic, when weekly tallies of new claims surged past six million. But recent improvements have been more arduous.

Of the 22 million jobs lost in March and April, more than nine million have been regained. And most analysts expect that the monthly jobs report, scheduled for release on Friday, will show a dip in August from double-digit unemployment rates.

But the damage to the economy has been wide and deep. As of mid-August, more than 29 million Americans were receiving some sort of unemployment insurance.

The report on Thursday was the first to be affected by a change in the way the Labor Department accounts for predictable seasonal patterns, like temporary holiday workers who are laid off in January.

The seasonally adjusted figure for the week was 881,000. The number looks much lower than the previous week’s adjusted figure of just over one million, but the drop can be attributed to the altered methodology. Because the change means seasonally adjusted numbers cannot be compared with those tallied until now, The Times is emphasizing the unadjusted figures.

The unadjusted number of 833,000 last week was an increase from 826,000 the week before.

Mr. Daco said he was particularly concerned about the increase last week in new claims for Pandemic Unemployment Assistance, the program for those generally ineligible for state jobless benefits. The total of 759,000 was up from 608,000 a week earlier.

“It could reflect a weakening economy in some of the states worst impacted by the health crisis,” he said, “or it could be that some of the workers that had returned are finding that it’s not possible or sustainable to return to their primary economic activity in the current environment.”

Image
Credit…Hiroko Masuike/The New York Times

Some businesses are hiring. Postings at the job search site Indeed rose slightly last week, although the total is still more than 20 percent below what it was this time last year.

The hospitality, tourism, and sports and fitness sectors are in the worst shape, with postings down more than 40 percent from where they were a year ago. Listings for higher wage jobs in banking, finance and software development are also much more scarce.

Construction, driving and warehouse jobs seem to be the most plentiful.

The job site ZipRecruiter has seen a gradual increase in job listings over the past couple of months, but the pace of growth began to slow in mid-August, said Julia Pollak, the company’s economist.

Consumers pulled back on spending after a $600 weekly jobless benefit supplement ceased in July. At the same time, many small businesses are running out of the money they received through the federal Paycheck Protection Program.

A recent survey from the National Federation of Independent Business found that one out of five small-business owners said they would have to shut down if economic conditions did not improve in the next six months.

The Labor Department report provided no fundamental change in the jobs picture that would resolve the stalemate between Republicans and Democrats in Congress over a new economic relief package.

With the end of the $600-a-week jobless benefit supplement, most states are moving ahead with plans to provide unemployed workers with a temporary replacement: a weekly $300 supplement paid out of federal disaster relief funds.

As of Wednesday, 45 states had applied for a grant from the Federal Emergency Management Agency. Six of those — Arizona, Louisiana, Missouri, Montana, Tennessee and Texas — have started paying out benefits, according to the Labor Department, but a vast majority have not.

Most will probably not be able to gear up to start payments until mid-September or later. The supplement is expected to last four or five weeks.

South Dakota is the only state that has confirmed it is not taking part. Gov. Kristi Noem says her state doesn’t need the money.

A handful of states, including Kentucky, Montana and West Virginia, have plans to boost the supplement with an additional $100.

Economists say the extra jobless benefit is crucial to the economy’s recovery. “The data are showing us that the expiration of the supplemental benefits is having a clear impact on consumption,” said Carl Tannenbaum, chief economist at Northern Trust. “As a result the momentum of the economic recovery seems to be slowing as we move to the end of the third quarter.”

The big question, Mr. Tannenbaum said, is whether Congress can respond effectively. “Are we going to build a bridge of sufficient length to get to the post-Covid environment without permanent economic damage?” he asked.

Image

Credit…Mark Makela for The New York Times

Karen Kent hopes that this will be the last week she will have to file a jobless claim. A cafeteria worker at a local high school in Pennington, N.J., Ms. Kent, 47, was laid off in early March as schools began closing in response to the coronavirus crisis.

Last week, she got a call telling her she was the one cafeteria worker from her school going back to work. Her first shift is supposed to start Wednesday.

Her husband, who works for a fire protection service company, was able to hold on to his job, but because he works on commission, his income has been unpredictable.

“The $600 is the only reason we stayed afloat,” Ms. Kent said of the weekly federal supplement, which lapsed at the end of July. Without it, her state benefits came to $157. “We’re at the stage where we’re pretty lean.”

She and her husband live in affordable housing, and they have twice deferred their monthly mortgage payment of $537 and condo association fee of $234. Then there’s the $185 they owe to Verizon and $457 in unpaid medical insurance bills.

Ms. Kent was glad she was called back to her $11.40-an-hour job. But she has asthma and a heart condition and is concerned about her exposure to the virus while working at a school.

“I’m terrified because I don’t know if I’m going to have enough protection,” she said. “But you have to do what you have to do to pay the bills.”

Others are still waiting for the chance to return to work.

Image

Credit…Hiroko Masuike/The New York Times

Whitney Anne Adams, 34, a freelance costume designer for film in Astoria, Queens, has been out of work since mid-March.

It took seven weeks for unemployment benefits to start arriving. And without the $600 jobless benefit supplement, she has been relying on her credit card since August. She said she now owed $15,000.

Ms. Adams, who has two rare blood disorders, had to go into debt before, for medical expenses. It took multiple jobs over more than a decade, sometimes working 100 hours a week, to pay off the $25,000 she owed. Finally, in February, she was debt-free for the first time in 12 years.

One month later, the pandemic hit, and she was back where she started.

“I’m most worried about going back to that pit of debt again,” she said.

Ben Casselman contributed reporting.

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