Key Highlights

  • 723,000 now jobless workers filed new claims for state unemployment benefits last week
  • Another 298,000 new claims filed under Pandemic Unemployment Assistance program

Though new claims for state and federal emergency relief declined last week, such new claims continue to exceed record numbers set in previous recessions. The US Labor Department announced that 723,000 now jobless workers filed new claims for state unemployment benefits last week. Add an additional 298,000 new claims filed under the Pandemic Unemployment Assistance federal program created to help freelancers, part-time workers and independent contractors who are not typically eligible for state benefits and you come up with a total of approximately +1.1M new claims.

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Diane Swonk, chief economist with the accounting firm Grant Thornton, said, “The gradual healing of the labor market continued, but the magnitude is still high. Technically, it looks like we’re in a recovery, but we’re still so much in the hole.”

Some of the jobless workers already receiving unemployment insurance benefits are soon to hit the wall on those benefits with its 26-week limits on benefits in most states. Those who do hit the wall are eligible to receive an additional 13 weeks of benefits via the Pandemic Emergency Unemployment Compensation federal program. The problem about transferring from one state program to the other federal program is not a sure thing in some states.

According to Mary C. Daly, president of the Federal Reserve Bank of San Francisco, believes that controlling the COVID pandemic is mandatory in order for both the economy and the job market to begin recovering. Daly said, “The economy right now is being dictated by coronavirus’s existence, and I think less by the potential for a vaccine.”

Both Jerome Powell, chairman of the Federal Reserve Bank, and Christine Lagard, head of the European Central Bank, agree with Daly…both are voicing caution about any prospective economic impact a coronavirus vaccine may have. Powell said, “(A coming vaccine) is certainly good and welcome news for the medium term…” but it’s too soon” to say the economy will be buoyed immediately. Powell also said, “…the next few months could be challenging…but the main risk we see…is clearly the further spread of the disease…”

Lagard said, “There are still uncertainties (concerning a vaccine) – about the logistics, about the transportation, about the rolling out, about the fabrication…”

In the midst of vaccine musings, the Pandemic Unemployment Assistance program and the Pandemic Emergency Unemployment Compensation programs are both set to expire at the end of 2020.

 

Thanks to The New York Times.

Also read: Will Forbearance Transition to Foreclosure and Eviction?, Latest Jobless Claims “Appear” to Drop BUT There’s a Caveat, New Unemployment Claims Below 2M for First Time in 11 Weeks