COVID-19

Continuing unemployment claims are down, but that doesn’t tell the whole story

Andy Uhler Nov 5, 2020
Heard on: Marketplace
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Unemployment benefits are running out for people who have been out of work for six months. Spencer Platt/Getty Images
COVID-19

Continuing unemployment claims are down, but that doesn’t tell the whole story

Andy Uhler Nov 5, 2020
Unemployment benefits are running out for people who have been out of work for six months. Spencer Platt/Getty Images
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In the most recent data from the Department of Labor, 751,000 people applied for state unemployment insurance last week, 7,000 fewer than the previous week. Continuing unemployment insurance claims dropped by 538,000, from 7.8 million to about 7.3 million.

When he sees continuing unemployment claims decline, economist David Wiczer at Stony Brook University would normally infer that people are finding jobs.

“The problem in the recent data is that we’ve had people unemployed for quite a while, and the regular state benefits start to expire,” he said.

Each state runs its own unemployment system and determines eligibility and benefit amounts. But no state lets people stay on those benefits for more than 26 weeks. 

Twenty-six weeks from the start of the shutdown in the middle of March was the middle of September. 

“If you’ve been out of work for six months, it’s hard for you to find a job,” said Andrew Stettner, senior fellow at The Century Foundation. “So we do think a lot of those people are still unemployed. Some of them are going onto extended benefits, but they’re not showing up in those state claims.”

Which could be one reason state claims are continuing to go down.

One of those extended benefits, Pandemic Emergency Unemployment Compensation, which was included in the CARES Act, provides 13 additional weeks of unemployment insurance once someone has exhausted their state benefits.

Another program called the Pandemic Unemployment Assistance expands eligibility to unemployed workers who ordinarily wouldn’t qualify for state benefits. 

“And that’s gig workers, self-employed,” said Eliza Forsythe, assistant professor of economics at the University of Illinois. “There’s a whole lot of different people that are eligible through this PUA program that typically are just completely left out of the system.”

People can be on PUA for up to 46 weeks in some states. The program is scheduled to expire at the end of the year.

COVID-19 Economy FAQs

Pfizer said early data show its coronavirus vaccine is effective. So what’s next?

In the last few months, Pfizer and its partner BioNTech have shared other details of the process including trial blueprints, the breakdown of the subjects and ethnicities and whether they’re taking money from the government. They’re being especially transparent in order to try to temper public skepticism about this vaccine process. The next big test, said Jennifer Miller at the Yale School of Medicine, comes when drug companies release their data, “so that other scientists who the public trust can go in, replicate findings, and communicate them to the public. And hopefully build appropriate trust in a vaccine.”

How is President-elect Joe Biden planning to address the COVID-19 pandemic and the economic turmoil it’s created?

On Nov. 9, President-Elect Joe Biden announced three co-chairs of his new COVID-19 task force. But what kind of effect might this task force have during this transition time, before Biden takes office? “The transition team can do a lot to amplify and reinforce the messages of scientists and public health experts,” said Dr. Kelly Moore, associate director for the Immunization Action Coalition. Moore said Biden’s COVID task force can also “start talking to state leaders and other experts about exactly what they need to equip them to roll out the vaccines effectively.”

What does slower retail sales growth in October mean for the economy?

It is a truism that we repeat time and again at Marketplace: As goes the U.S. consumer, so goes the U.S. economy. And recently, we’ve been seeing plenty of signs of weakness in the consumer economy. Retail sales were up three-tenths of a percent in October, but the gain was weaker than expected and much weaker than September’s. John Leer, an economist at Morning Consult, said a lack of new fiscal stimulus from Congress is dampening consumers’ appetite to spend. So is the pandemic.

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