Unemployment: 1.5 Million New State Claims in Weekly Tally

June 25, 2020
Business

One possibility is that many states are still working through a huge backlog of claims, as old computer systems struggle to adapt to an inflow that dwarfs that of previous downturns.

In addition, some businesses that were spared early in the crisis may be starting to trim their work forces. Changes in the guidelines for the federal Paycheck Protection Program may also be playing a role; as requirements for maintaining payrolls expire, more workers may be getting pink slips.

The latest monthly jobs data from the federal government only added to the mystery. In May, employment rose by 2.5 million, the Labor Department reported, with the official unemployment rate dropping to 13.3 percent. The report for June will be released in a week.

“There’s a lot of turmoil in the labor market, a lot of churn,” said Joel Prakken, chief U.S. economist at the consulting and research firm IHS Markit. While economists have debated whether the recovery will take the form of a V or a Nike swoosh, Mr. Prakken said the recent uptick in coronavirus cases could create a W-shaped rebound. “The upturn in cases is worrisome,” he added.

So far, the recovery has been uneven, according to data analyzed by IHS. After being down 100 percent in April, the number of seated diners at restaurants is now off by 40 percent, a considerable improvement. Demand for gasoline is halfway back to where it was before the virus. But spending on air travel and moviegoing remains depressed.

The shaky economic outlook has both experts and workers worried about the looming expiration of the Federal Pandemic Unemployment Compensation program, which provides a supplement of $600 a week to those collecting state jobless benefits.

“It’s made all the difference, because basic unemployment isn’t enough,” said Richard Brenin, who was laid off in March from his position doing postproduction work for television shows and movies in Los Angeles.

Article source: https://www.nytimes.com/2020/06/25/business/economy/coronavirus-unemployment-claims.html