WASHINGTON (AP) – The number of Americans applying for unemployment relief rose to 861,000 last week, suggesting that the number of layoffs remains painfully high despite a steady decline in the number of confirmed viral infections.
Claims from laid-off workers were up 13,000 from the previous week, which was sharply revised higher, the Labor Ministry said ThursdayBefore the virus broke out in the United States in March, there were never more than 700,000 weekly claims for unemployment benefits, even during the Great Recession of 2008-2009.
The figures underline that the labor market has stalled: employers added just 49,000 jobs in January after cutting workers in December. Nearly 10 million jobs are lost in the pandemic. While the unemployment rate fell from 6.7% to 6.3% last month, this was partly because some people stopped looking for jobs. People who are not actively looking for work are not considered unemployed.
Still, fraudulent unemployment relief claims in some states and other issues, including possible claims arrears, can increase totals. Last week, for example, Ohio reported a massive increase in filings and said it had set it aside about half of that increase for further investigation out of concerns about fraud. And this week, Ohio reported that applications under a federal program that covers the self-employed and gig workers rose from about 10,000 to more than 230,000. That could reflect a backlog in applications, as Ohio had only reported data under that program two weeks ago.
Likewise, Illinois reported this week that the number of unemployment claims under the regular state program doubled – from 34,000 to nearly 68,000.
“The data on unemployment claims remains a mess,” said Stephen Stanley, chief economist at Amherst Pierpont.
Applications could increase in the coming weeks, economists said, due to ice storms that have led to business shutdowns across the country. Still, economists are generally optimistic that as the weather improves, COVID vaccines become more widely administered and further federal aid is provided, the economy will pick up in the spring and summer.
The increase in claims may also partly reflect the extension of two federal unemployment benefit programs under an aid package that Congress passed late last year. Due to the extension of those programs, some people who had used up all their unemployment benefits became eligible for a new application. The federal aid package also provided unemployment benefits of $ 300 a week on top of regular government benefits.
Thursday’s report found that a total of 18.3 million people received unemployment benefits on January 30, up from 19.7 million the week before. About three-quarters of those recipients receive checks from federal benefit programs, including programs that provide unemployment relief beyond the 26 weeks most states provide. That trend suggests that a significant proportion of the unemployed have been out of work for more than six months, reflecting a bleak labor market for many.
Still, the two federal unemployment assistance programs – one offering up to 24 additional weeks of support and another for self-employed and gig workers – are due to expire in about a month.
President Joe Biden is proposing to extend both programs through August as part of his $ 1.9 trillion package now before Congress. The legislation would also provide an additional $ 400 a week in federal unemployed aid, on top of state benefits. That money would replace a $ 300 a week benefit that was included in the aid package approved last year.
Some industry data suggests that the number of recruitments remains weak. UKG, a time management software company, estimates that among its predominantly small business customers, the number of national shifts has increased by only 0.2% in the past month. That lukewarm increase indicates that hiring has been slow so far this month.
Still, the economy is showing signs of recovery as states and cities have eased some business restrictions and the most recent round of $ 600 stimulus checks made their way through the economy. Sales in stores and restaurants were up 5.3% in January from December, the government said Wednesday.
Furniture stores and electronics and appliance stores recorded some of the strongest increases, likely driven by the healthy rise in home sales last year
Factory output also increased Last month, the Federal Reserve said on Wednesday, its fourth consecutive rise, led by increased production of steel and other metals.