WASHINGTON (AP) – The number of Americans applying for unemployment benefits rose to 861,000 last week, evidence that layoffs remain painfully high, despite a steady decline in the number of confirmed viral infections.
Demand from laid-off workers rose 13,000 from the previous week, which was revised sharply higher, the Labor Department said Thursday.. Before the virus broke out in the United States in March last year, weekly claims for unemployment benefits had never exceeded 700,000, even during the Great Recession of 2008-2009.
Figures show that the job market has stalled, with employers adding only 49,000 jobs in January after the workers were cut in December. Nearly 10 million jobs are lost in the pandemic. Although the unemployment rate fell last month from 6.7% to 6.3%, it did so in part because some people stopped looking for jobs. People who are not actively looking for a job are not considered unemployed.
However, fraudulent claims for unemployment benefits in some states and other issues, including potential claims arrears, may increase overall. Last week, for example, Ohio reported a huge increase in demand and said it put aside about half of this increase for further review due to concerns about fraud. And this week, Ohio reported that applications under a federal program covering self-employed workers and concert workers have risen from about 10,000 to more than 230,000. This could reflect an application delay, as Ohio had not reported data under that program until two weeks ago.
Likewise, Illinois reported this week that unemployment claims under its regular state program have doubled – from 34,000 to nearly 68,000.
“Unemployment claims remain a mess,” said Stephen Stanley, chief economist at Amherst Pierpont.
Demand could rise in the coming weeks, economists said, due to ice storms that have shut down businesses across the country. However, economists are generally optimistic that as the weather improves, COVID vaccines are administered more widely and more federal aid is distributed, the economy will take over in the spring and summer.
The increase in claims may partly reflect the expansion of two federal unemployment benefit programs as part of a package of aid adopted by Congress late last year. The extension of these programs meant that some people who had exhausted all their unemployment benefits were eligible to apply again. The federal aid package also provided an unemployment benefit of $ 300 per week, in addition to the usual state benefits.
Thursday’s report showed that a total of 18.3 million people had been receiving unemployment benefits since January 30, down from 19.7 million in the previous week. About three-quarters of these beneficiaries receive checks from federal benefit programs, including programs that provide unemployment benefits over the 26 weeks provided 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 bleak labor market for many.
However, the two federal unemployment assistance programs – one that provides up to 24 additional weeks of support and another that covers the self-employed and concert 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 before Congress. The legislation would also provide an additional $ 400 a week in federal aid to the unemployed, in addition to state benefits. This money would replace a benefit of $ 300 per week that was included in the aid package approved last year.
Some industry data suggests that employment remains weak. UKG, a company that provides time management software, estimates that among its customers, the number of shifts worked nationally has risen by just 0.2% in the last month. This warm rise indicates that employment has been slow so far this month.
However, the economy showed signs of recovery as states and cities eased some trade restrictions, and the latest round of $ 600 stimulus checks made their way through the economy. Retail sales and restaurants rose in January, up 5.3% from December, the government said on Wednesday.
Furniture and electronics and home appliances stores saw some of the strongest growth, probably the result of last year’s healthy gain in home sales..
Factory production has also increased Last month, the Federal Reserve said on Wednesday its fourth consecutive increase, driven by higher production of steel and other metals.