Another 3 million people filed initial unemployment claims last week on a seasonally adjusted basis, according to the Department of Labor.
This brings the total number of applicants for the first time to 36.5 million since mid-March. This represents 22.4% of the March workforce. The American workforce shrank in April, with the worsening of the crisis.
It was the eighth consecutive week that the number of initial requests declined after reaching a peak of 6.9 million in the last week of March. Economists say this is relatively good news because it means that things are not getting worse.
Initial unemployment claims are one of the most “real-time” measures of the economy available. Most economic data is weeks, if not months, late. That’s why weekly claims data is so important during this crisis.
But now that initial requests have been declining for two consecutive months, economists are starting to shift their attention to the continuing claims for unemployment benefits, which count people who file multiple weeks in a row. That number was 22.8, up slightly from the previous week.
A decrease in the ongoing declarations could indicate that the reopening of the economy is successful in bringing people who lost their jobs due to the blockade to the labor market.
In addition, approximately 842,000 people in 29 states made initial requests for the pandemic unemployment assistance program, which Congress created to provide benefits to independent contractors, self-employed workers, contract workers and some people affected by the coronavirus. These candidates are not included in the seasonally adjusted data for the traditional unemployment program.
More than 3.4 million Americans in 23 states received benefits under the PUA program in the week ending April 25, a peak of over 2.4 million in seven days. Michigan had the largest number of residents making initial requests and receiving payments under the pandemic program, followed by California.
Public spending goes up
Spending on unemployment benefits has skyrocketed to over $ 100 billion so far this year, a huge jump over a few weeks ago, according to Treasury Department data.
Federal and state disbursements totaled just under $ 102 billion, as of May 12, compared to $ 12.7 billion in early March.
Almost $ 37 billion has already been spent this month alone.
In April, the federal government poured nearly $ 27 billion into unemployment benefits as funds from Congress’s historic reinforcement for the program started to flow, data from the Treasury Department showed.
Lawmakers in late March approved a $ 600 increase in weekly payments for up to four months and added 13 weeks to the benefits, both compliments from the federal government. In addition, they expanded eligibility to independent contractors, self-employed workers, concert workers and some coronavirus-affected people until the end of the year, also funded at federal level. The measure was expected to cost around $ 260 billion when it was approved as part of a $ 2 trillion coronavirus rescue package.
States, meanwhile, disbursed just over $ 21 billion in benefits in April, up from $ 4 billion the previous month.
The $ 48 billion paid in April equates to more than three times the amount distributed at the monthly peak of the Great Recession after adjusting for inflation, according to a new report from The Hamilton Project at the Brookings Institution.
Unemployment benefits compensated for a small part of the decline in personal income in March, but about half of the wages and wages lost in April, according to preliminary calculations by the researchers.
As increasing numbers of Americans join and remain in the unemployment insurance program, spending will continue to skyrocket. The disbursements so far show that states have struggled to manage the wave of claims and implement federal provisions, said Ernie Tedeschi, an economist at the ISSI of Evercore and a former Treasury official.
“States have been slow to integrate new emergency payments for regular unemployment insurance beneficiaries and states have been super slow to implement new PUA benefits,” said Tedeschi. “This shows that states must recover.”
Coffee enthusiast. Travel scholar. Infuriatingly humble zombie fanatic. Thinker. Professional twitter evangelist.