New jobless claims are down, but unemployment benefits are, too
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Last week, 787,000 Americans filed first-time claims for unemployment benefits. The Labor Department also revised the previous two weeks downward, and that means since the beginning of October, we’ve seen fewer people filing new jobless claims each week than any time since the pandemic started in mid-March.
But tens of millions of Americans are still out of work. Millions of them are running out of unemployment benefits. And those still on the rolls are no longer getting $600 a week in extra federal payments that expired in late summer.
That is sucking billions of dollars out of this economy, compared to earlier in the pandemic.
Since several assistance programs for the unemployed started running out midsummer, $20 billion is not getting into the pockets of out-of-work Americans each week.
Andrew Stettner, senior fellow at The Century Foundation, said based on Treasury Department data, those Americans were getting $26 billion a week.
“That has come crashing down to just $6 billion,” Stettener said. “It’s much less support to families and to the economy than we had.”
That $600 a week in federal pandemic payments expired at the end of July. The president’s partial replacement program ran out of money last month.
Also, folks laid off back in March and April are now running out of their 26 weeks of state jobless benefits. Some, but not all, are getting a 13-week federal extension.
And that has made a huge dent in the purchasing power of households suffering unemployment, said Mark Hamrick, senior economic analyst at Bankrate.com.
“They are really having to scrape to get by these days just for basic needs, such as to pay for shelter, pay the bills, put food on the table — and forget about luxuries,” he said.
That’s exactly what Brooke Wetzel has seen play out at her florist business, The Plum Dahlia, in Los Angeles. When the economy started to open up in late spring, sales picked up. But since August, “things have gotten pretty slow [with] people not having that extra $50 or $75 for a flower arrangement,” she said.
Now Wetzel is working part time and spending the rest home schooling her kids.
COVID-19 Economy FAQs
What do vaccines mean for economic recovery?
COVID-19 is not going anywhere anytime soon, according to expert witnesses who testified at a recent hearing held by the Joint Economic Committee. Put simply, we can’t eradicate the virus because it infects other species, and there will also be folks who choose not to get the vaccine or don’t mount an immune response, according to Dr. Céline Gounder at NYU School of Medicine & Bellevue Hospital. “That means we can’t only rely on vaccination,” Gounder said. She said the four phases of recovering from the pandemic are ending the emergency, relaxing mitigation measures, getting to herd immunity and having long-term control.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
What do I need to know about tax season this year?
Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.
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