WASHINGTON (AP) – The number of Americans applying for unemployment benefits increased last week to 861,000, evidence that the layoffs remain painfully high despite a steady drop in the number of confirmed viral infections.
Requests for laid-off workers increased by 13,000 from the previous week, which was revised upwards, the Department of Labor said on Thursday.. Before the virus erupted in the United States last March, weekly claims for unemployment insurance had never reached 700,000, even during the Great Recession of 2008-2009.
Figures show the job market has stagnated, with employers creating just 49,000 jobs in January after cutting workers in December. Nearly 10 million jobs remain lost to the pandemic. Although 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 seeking work are not considered unemployed.
Still, fraudulent claims for unemployment benefits in some states and other problems, including possible backlogs of claims, may be raising totals. Last week, for example, Ohio reported a huge increase in orders and said it had booked about half of that increase for further analysis due to concern about fraud. And this week, Ohio reported that enrollments in a federal program that covers self-employed and work workers jumped from about 10,000 to more than 230,000. This may reflect an accumulation of applications, because Ohio had not reported data under that program until two weeks ago.
Similarly, Illinois reported this week that claims for unemployment insurance in its regular state program have doubled – from 34,000 to almost 68,000.
“The unemployment complaint data remains a mess,” said Stephen Stanley, chief economist at Amherst Pierpont.
Orders could rise in the coming weeks, economists said, because of the ice storms that have caused companies to shut down across the country. However, economists are generally optimistic that as the climate improves, COVID vaccines are more widely administered and more federal aid is distributed, the economy will recover in the spring and summer.
The increase in claims may also reflect, in part, the extension of two federal unemployment benefit programs under an aid package that Congress passed last year. The extension of these programs meant that some people who had used all of their unemployment benefits could apply again. The federal aid package also provided an unemployment benefit of $ 300 a week in addition to regular state benefits.
Thursday’s report showed that a total of 18.3 million people received unemployment benefits on January 30, up from 19.7 million in the previous week. About three-quarters of these beneficiaries are receiving checks from federal benefit programs, including programs that provide unemployment benefits beyond the 26 weeks granted by most states. This trend suggests that a considerable proportion of the unemployed have been out of work for more than six months, reflecting a discouraging job market for many.
However, the two federal unemployment benefits programs – one that provides up to 24 extra weeks of support and one that covers self-employed and work workers – are scheduled to expire in about a month.
President Joe Biden is proposing to extend both programs until August as part of his $ 1.9 trillion package now in Congress. The legislation would also provide an additional $ 400 a week in federal unemployment benefits, in addition to state benefits. That money would replace a $ 300 per week benefit that was included in the aid package approved last year.
Some industry data suggests that hiring remains weak. UKG, a company that provides time management software, estimates that among its customers, mostly small businesses, the number of shifts worked nationwide increased by just 0.2% in the past month. This tepid increase signals that hiring has been slow so far this month.
Still, the economy showed signs of recovery, as states and cities eased some restrictions on business and the latest round of $ 600 stimulus checks passed through the economy. Retail store sales and restaurants soared in January, up 5.3% from December, the government said on Wednesday.
Furniture and electronics stores and home appliances recorded some of the strongest increases, probably as a result of last year’s healthy gain in home sales.
The factory’s production also increased Last month, the Federal Reserve said on Wednesday, its fourth consecutive increase, led by greater production of steel and other metals.