Unemployment claims rise by 2.4 million as states try to open for business

A total of 38.6 million workers have now applied for unemployment assistance over the past nine weeks.

Another 2.4 million workers filed new unemployment claims last week, DOL reported, suggesting that the economic pain from the coronavirus is continuing even as states begin to allow businesses to reopen.

The coronavirus has forced nearly 39 million Americans out of work and onto state jobless benefit rolls in nine weeks, leading to levels of unemployment not seen since the Great Depression of the 1930s.

“The coronavirus crisis continues to inflict swift and deep impacts on the labor market at a near unprecedented clip,” Glassdoor Senior Economist Daniel Zhao said in reaction to the numbers. “While recent indicators show the initial steep job declines are slowing, the labor market remains in a deep hole it will have to climb out of.”

Heidi Shierholz, senior economist at the left-leaning Economic Policy Institute, noted that the number of new claims filed last week is likely closer to 4.4 million, based on how DOL now separates its data.

The unadjusted raw number of claims filed in regular state unemployment programs last week totaled at 2.2 million workers. But the report indicates another 2.2 million Americans also sought jobless aid under the new temporary Pandemic Unemployment Assistance program.

California saw the highest number of new claims last week, with an estimated 246,115 applications filed. New York followed with an estimated 226,521 new claims.

While the number Americans seeking jobless benefits has slowly declined over the past several weeks, some economic forecasts also suggest that huge swaths of the workforce could remain unemployed for a prolonged period.

The nonpartisan CBO warned in an update to its economic forecast Tuesday that unemployment will rise to 16 percent in the third quarter if a small business lending program created in a coronavirus stimulus package expires. By the end of 2021, the agency projects unemployment will still be as high as 8.6 percent. 

Federal Reserve officials said they worry the U.S. could be facing a long and severe recession if there are multiple outbreaks of coronavirus as lockdown orders are relaxed, in minutes of their April meeting released Wednesday. The central bank officials cited an “extraordinary amount of uncertainty and considerable risks.”

Andrew Stettner, senior fellow at The Century Foundation said that in the 35 states that have begun to open their economies statewide, “initial claims only declined by 14 percent last week from the prior week.”

He said the data shows reopening the economy “does not necessarily equate with robust rehiring,” pointing out that among those 35 states, nine actually saw an increase in the number of new workers claiming benefits.

In Washington, Democrats and Republicans hold different views about whether another round of unemployment and small business aid is needed.

The House last Friday passed a mammoth $3 trillion stimulus bill that would expand some unemployment benefits and provide more direct payments to the public.

But Republicans and the Trump administration have said they want to wait and see the effect of three relief packages passed in March, and instead are moving forward on proposals to shield businesses from coronavirus-related lawsuits.

President Donald Trump has also signaled he opposes extending the weekly $600 boost in unemployment insurance authorized in one of the coronavirus rescue bills that is due to expire at the end of July.

Democrats’ latest $3 trillion coronavirus relief package would extend that sweetener through Jan. 31.

This blog originally appeared at Politico on May 21, 2020. Reprinted with permission.

About the Author: Rebecca Rainey is an employment and immigration reporter with POLITICO Pro and the author of the Morning Shift newsletter. Prior to joining POLITICO in August 2018, Rainey covered the Occupational Safety and Health administration and regulatory reform on Capitol Hill. Her work has been published by The Washington Post and the Associated Press, among other outlets.

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Madeline Messa

Madeline Messa est étudiante en troisième année de licence à la faculté de droit de l'université de Syracuse. Elle est diplômée en journalisme de Penn State. Grâce à ses recherches juridiques et à ses écrits pour Workplace Fairness, elle s'efforce de fournir aux gens les informations dont ils ont besoin pour être leur meilleur défenseur.