Unemployment Claims Surge Along With the Coronavirus

Unemployment Claims Surge Along With the Coronavirus

Kelsey Kremer/The Register

About 965,000 people filed initial jobless claims in state unemployment systems last week, the Department of Labor announced Thursday. The new filings far exceeded economists’ expectations, underscoring the ongoing economic damage caused by the Covid-19 pandemic.

Another 284,000 filed for Pandemic Unemployment Assistance, the federal program for those who are normally not eligible for benefits, including self-employed and gig workers. All told, about 1.2 million people filed for unemployment benefits. Using unadjusted data, the total is closer to 1.4 million.

“Last week was the 43rd straight week total initial claims were greater than the worst week of the Great Recession,” Heidi Shierholz of the Economic Policy Institute wrote.

“Weekly first-time jobless claims are stuck at an uncomfortably high level,” wrote CNN’s Anneken Tappe. “In late August, the figure dropped below 1 million, but since then, significant improvements have been hard to come by -- and last week represented a huge step in the wrong direction.”

Some economists expect jobless claims to remain high for weeks to come. “Claims will drift sideways, more or less, over the next two to three months, before restrictions on the services sector can be gradually eased as vaccination brings herd immunity into sight,” Ian Shepherdson of Pantheon Macroeconomics said in a note.

Joseph Brusuelas, chief economist at the consulting firm RSM, said that with more than 18 million people receiving some kind of unemployment assistance, more help from the federal government will be needed. “Despite those who make the case that all is well and that no additional aid is necessary, we think that this data affirms the necessity for another round of fiscal aid,” Brusuelas wrote.