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
Are states ready to roll out COVID-19 vaccines?
Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.
How is the service industry dealing with the return of coronavirus restrictions?
Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.
How are hospitals handling the nationwide surge in COVID-19 cases?
As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.
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