Almost three million Americans filed new unemployment claims last week, federal figures showed Thursday, bringing the eight-week nationwide total to 36.5 million since the onset of coronavirus lock downs and deepening the pit from which the world’s largest economy needs to climb to recovery.
The numbers of new claims in Pennsylvania and New Jersey subsided for the sixth straight week from peaks in late March, though they still remain very high by pre-pandemic standards: Almost 1.8 million Pennsylvanians have now filed claims, or 27% of the workforce, along with more than 1 million New Jersey workers, or 23% of the workforce, according to the weekly report from the U.S. Department of Labor.
- America hasn’t seen unemployment rise this sharply since 1948 — and experts say it’s not over yet
- Millions more Americans filed jobless claims and Pa. is burning through unemployment cash
- The deluge of newly jobless workers is crashing the Pa. unemployment system as officials field 20,000 calls a week
About 75,557 Pennsylvanians filed new claims in the week ending May 9 after losing their jobs or getting hours reduced. In New Jersey, 68,685 workers filed new claims for assistance last week, according to federal data.
“New unemployment claims remain at extraordinarily high levels and the modest decline points to an extended deterioration in the labor markets,” Joel Naroff, president and founder of Naroff Economic Advisors in Bucks County, said Thursday in a note to clients.
The new jobless claims underscored the grim message delivered Wednesday by Federal Reserve Chairman Jerome Powell, who said the U.S. is experiencing the “biggest shock our economy has felt in modern times” and is likely to face an “extended period” of weakness. Parts of the nation have begun reopening from lock downs, and frustration with the constraints is expressed in growing pressure to lift to stay-at-home orders despite warnings from public-health authorities.
The weekly snapshot of new claims differs from the labor department’s monthly surveys, which last week reported that the jobless rate jumped to 14.7% in April, or 23.1 million Americans without a job. It was the largest one-month surge in joblessness on record, though the total remains less severe than estimated levels achieved in 1933, when almost 25% of the country’s workforce was unemployed.
Some economists project that the unemployment rate could reach as high as 20% this year. “There really isn’t any sign that the labor market is bottoming out yet,” said Daniel Zhao, senior economist at Glassdoor, the career website.
President Donald Trump, who was in Pennsylvania on Thursday, appeared to respond to the report by tweeting, “Good numbers coming out of States that are opening. America is getting its life back!”
But the number of people seeking unemployment benefits actually rose last week in Georgia and in Florida, two states that started to reopen.
Pennsylvania was among 17 states, led by California, that reported declines in the number of ongoing claimants for unemployment benefits, down about 172,000 people to 1,061,000 for the week ending May 2. That could indicate employers with loans under the federal Paycheck Protection Program are calling furloughed workers back, or that some laid-off workers are now working part time.
The Pennsylvania Department of Labor and Industry said it could not speculate about what caused the number of continued claims to decline. But it said Friday that the decrease was most notable among workers in food services and drinking places, personal and laundry services, ambulatory health care services and social assistance industries.
According to Thursday’s numbers, the “insured unemployment rate” was 15.7% for the week ending May 2, up 0.3% from the previous week. The insured unemployment rate is the number of people currently receiving unemployment insurance as a percentage of the labor force, but it leaves out the long-term unemployed who are no longer eligible for benefits.
The Pennsylvania Department of Labor and Industry, which like many state agencies has been overwhelmed with unprecedented jobless claims, this week said this week that it had issued about 13.9 million payments in eight weeks, totaling more than $6.8 billion. That’s almost four times the benefits paid out to jobless workers for all of last year.
More than $4.6 billion of the Pennsylvania payments is regular unemployment compensation, and more than $2.14 billion paid out is Federal Pandemic Unemployment Compensation benefits, an extra $600 a week. The federal government will pick up the tab for the supplemental benefits as part of the coronavirus economic relief package enacted in late March.
As of March 7, New Jersey paid out about $2.7 billion in unemployment benefits since the pandemic began. More than half the amount, or $1.5 billion, was distributed under the federal government’s supplemental $600-a-week pandemic payments.
About 842,000 people in 29 states applied for aid last week through a separate program for self-employed and gig workers called Pandemic Unemployment Assistance (PUA). Pennsylvania officials said they have paid out $201 million so far in PUA claims, and New Jersey has issued $79 million in PUA payments.
The stalled economy and the decline in employment are taking a toll on state and local governments, which cut almost one million workers in April.
States are running out of money and collectively posing a threat to the national economy, said Lucy Dadayan, senior research associate at the Urban-Brookings Tax Policy Center. The recession will likely produce the sharpest plunge in state tax revenue since the center began tracking such data in the early 1970s.
About two-thirds of the states have reported tax revenue data for April, with most showing worrisome declines. California’s tax revenue fell 65% compared with a year earlier. New Jersey’s dropped 59%, Pennsylvania’s 51%. Sales-tax revenue has shrunk as consumer spending has tumbled. And income taxes have been diminished by the widespread job losses.