Weekly Jobless Claims Remain Stubbornly High at 1.48 Million

Weekly Jobless Claims Remain Stubbornly High at 1.48 Million
President Donald J. Trump addresses the nation from the Oval Office of the White House Wednesday evening, March 11, 2020, on the country’s expanded response against the global Coronavirus outbreak. (Official White House Photo by Joyce N. Boghosian)
Joyce N. Boghosian/The White House/Flickr

Nearly one and a half million Americans lost their jobs last week.

The Department of Labor said that 1.48 million filed claims for unemployment benefits last week, more than expected.

Economists surveyed by Econoday had been expecting 1.38million claims.

This was the 14th consecutive week with initial claims above one million.

Despite the higher than expected number of new claims, the total of those receiving jobless benefits fell. Total recipients, or continuing claims, fell by 767,000 to 19.52 million.

Some investors may be taking comfort in the fact that, as Barron’s explained  “the trend in claims is still lower, and that continuing claims beat forecasts.” That, according to Barron’s, “seems to have convinced traders—or their algorithms—that the headline miss wasn’t a reason to panic.”

The federal government has been chipping in an extra $600 a week to state unemployment benefits, making the program much more generous. Many workers can now earn more on unemployment than they did when they had a job.  An analysis done by Isabel Soto of the American Action Forum found that the maximum unemployment benefit amount is greater than median wage in all states except the District of Columbia. That may be discouraging some workers from seeking work and leaving the unemployment rolls. 

“Using 2019 wage and unemployment data, an upperbound estimate of 92.8 million workers (or 63 percent of the workforce) typically make below the maximum weekly unemployment benefits under the CARES Act,” Soto wrote.

These super-sized benefits, however, are set to run out in July.

In addition to claims for regular unemployment benefits, the government now offers two new forms of unemployment benefits to business owners, self-employed, gig-workers, and independent contractors who would not ordinarily qualify for unemployment benefits.

The highest insured unemployment rates in the week ending June 6 were in Nevada, Puerto Rico, Hawaii, New York, California, Michigan, Louisiana, Massachusetts, the Virgin Islands, and Connecticut.

The biggest increases in initial claims for the week ending June 13 were in Oklahoma, Texas, New Jersey, and New York.

Read More