About 30 Million Workers Are Collecting Jobless Benefits

(NYT) - Getting a precise nationwide count of the number of people collecting unemployment benefits has been hampered since the start of the coronavirus pandemic.

About 30 Million Workers Are Collecting Jobless Benefits

Data from overwhelmed and understaffed state offices has been inconsistent and strewn with errors. And there may be some double-counting as the agencies struggle to clear out the flood of new and backlogged claims.

On Thursday, the Labor Department reported that the total number of people claiming unemployment insurance for the week ending July 4 — without any seasonal adjustments — equaled 31.8 million.

Ernie Tedeschi, a policy economist at Evercore ISI, estimates that the actual figure is closer to 30 million, roughly one out of every five workers — a staggering number by any count.

The Labor Department categorizes the claims in separate batches. In one are those filed through states’ regular unemployment insurance systems, a number that rose last week for the first time in months. A second includes people who filed through the federal government’s temporary Pandemic Unemployment Assistance program, for workers not ordinarily eligible for state benefits. A third and growing group includes recipients who exhausted their regular benefits but are eligible for an additional 13 weeks of emergency assistance that Congress passed after the coronavirus outbreak.

Over the past couple of months, the labor market showed surprising gains as businesses reopened and rehired workers. The overall jobless rate dipped in June to 11.1 percent from a peak of 14.7 percent in April. But troubling weaknesses may be reflected in the weekly tallies of laid-off workers filing new applications, Mr. Tedeschi said.

“I’m surprised that the claims numbers haven’t gotten better yet,” he said.

The government reported on Thursday that more than 1.4 million workers filed new claims for state unemployment benefits last week, the first time that the weekly tally has risen in more than three months.

The upturn, from about 1.3 million in the two preceding weeks, comes just days before an extra $600-a-week jobless benefit is set to expire.

An additional 975,000 claims were filed last week by freelancers, part-time workers and others who do not qualify for regular state jobless aid but are eligible for benefits under an emergency federal program, the Labor Department said. Unlike the state figures, that number is not seasonally adjusted.

“At this stage, you’re seeing all the wrong elements for recovery,” said Gregory Daco, the chief United States economist at Oxford Economics. “A deteriorating health situation, a weakening labor market and a softening path for demand.”

The report on Thursday has particular resonance: It reflects the week that will be used by the department to calculate the June jobs data and unemployment rate.

The stubbornly high rate of new weekly claims more than four months into the coronavirus pandemic “suggests that the nature of the downturn has changed from early on,” said Ernie Tedeschi, a policy economist at Evercore ISI. It may mean that businesses are shutting down again as cases surge in some places, or that funds from emergency federal loans through the Paycheck Protection Program are running out, he said — or worse, something more fundamental.

“It might be that businesses are running through their first line of credit,” he said, “and now they’re facing the music of an economy that has recovered a little bit but not nearly enough.”