By Eric Morath
The number of people applying for jobless aid is expected to
have held at a historically high level last week, as layoffs remain
elevated despite signs of a broader labor-market recovery.
Weekly initial claims for jobless benefits through regular state
programs have stabilized just below 900,000 in recent weeks. That
is well down from the 6.9 million weekly claims filed in late March
but remained above the highest level before this year in records
going back to the 1960s. Similarly, the number of workers receiving
unemployment payments has declined this summer but remained well
above pre-coronavirus pandemic levels.
The decreased number of unemployment rolls covered by regular
state programs -- which covers most workers -- indicates some laid
off workers are finding new employment or are being recalled.
However, the decrease could also reflect benefits that are expiring
for others. Many states offer up to six months in jobless benefits,
so those who applied in March could be losing those benefits and
would need to shift to other emergency programs.
"Unemployment is down from its peak, but I remain concerned,"
said Bradley Hardy, an economist at American University in
Washington, D.C. He added that part-time workers and those with
jobs tied to still sparsely populated downtowns, malls and
universities are particularly vulnerable. "If you have the flu
season combined with a potential second wave, I'd be concerned
about forecasting continued improvement in the job market."
The labor market has partially recovered from the severe
downturn caused by the coronavirus pandemic and related shutdowns
of businesses. Employers through August have replaced about 11
million jobs of the 22 million shed in March and April at the
beginning of the pandemic. But the pace of hiring slowed later in
the summer, and layoffs have remained persistent.
Companies from bakery chain Maison Kayser to apparel company
Under Armour to hotel operator Marriott International Inc. are
among those warning of job cuts in recent weeks. Still, layoffs
this summer were more than offset by the recalling of workers and
new hiring. Amazon.com Inc. this week said it plans to hire 100,000
additional employees in the U.S. and Canada.
The Labor Department's weekly unemployment-benefits report
provides data on regular state programs -- which have served as an
economic bellwether for a half-century -- as well as details from
two pandemic-specific programs first implemented in March.
The larger of those programs -- available to the self-employed,
gig workers and others not typically eligible for unemployment aid
-- paid benefits to about 14 million workers in recent weeks,
according to the Labor Department. However, analysts are skeptical
about that figure, which has recently exceeded the number of people
paid under state programs, which insures about 146 million workers.
At the end of last year, there were about 10 million self-employed
workers, according to the Labor Department
State reporting and accounting errors are causing the Labor
Department to overstate the figure, said Andrew Stettner, senior
fellow at the left-leaning Century Foundation who studies the
unemployment system. He estimated about 10 million people are being
paid benefits under the program. He said such errors are to be
expected from a new program that was set up quickly.
The Labor Department is monitoring Pandemic Unemployment
Assistance claims data to identify potential anomalies and is
working with states where the claims load appears to be overstated,
a spokesman said.
University of Illinois labor economist Eliza Forsythe found that
states' monthly reports to the Labor Department showed the amount
paid out in dollars for pandemic beneficiaries implied fewer
individuals are receiving payments than are appearing in the weekly
data. That could show states are catching potentially fraudulent
claims before they are paid, she said, but it could also suggest
bureaucratic problems in issuing payments.
The Pandemic Unemployment Assistance program is also more
susceptible to fraud, said Wayne Vroman, an economist at the Urban
Institute, who also studies unemployment. While state unemployment
programs are tied to businesses' tax records, the pandemic program
asks self-employed workers to report their own income and other
information, opening the system up to abuse.
"There has to be a lot more fraud," Mr. Vroman said. "Eventually
you're supposed to verify eligibility against individual tax forms,
but I don't think states have time to check on accuracy of the
A second pandemic program pays 13 additional weeks of benefits
to individuals who have exhausted their regular unemployment
benefits. Enrollment in that program has exceeded 1 million in
recent weeks, consistent with recipients migrating from state
In addition to the emergency programs, Congress had authorized
federal funding for an extra $600 a week in unemployment benefits
on top of amounts paid by states. Those benefits expired at the end
of July. In early August, President Trump issued an executive
action allowing states to tap $44 billion disaster-relief funds for
$300 a week in enhanced aid.
Since then, the Federal Emergency Management Agency has
distributed more than $35 billion in funds to 49 states, Guam, the
U.S. Virgin Islands and the District of Columbia, an agency
spokesperson said Wednesday. South Dakota didn't seek the funds.
States are authorized to make the $300 enhanced payments for no
more than six weeks.
While unemployment remains elevated, demand for labor is
increasing in some industries, said Karen Fichuk, chief executive
of Randstad North America.
She said her company is seeing more placements at
auto-manufacturing firms, companies tied to loan refinancing, and
at warehouses and call centers, the latter two reflecting growth in
online shopping. Randstad has 13,500 open positions, including
entry-level warehouse jobs that start at $12 an hour and
call-center jobs that can be done from home and pay as much as $20
The staffing firm is offering training to those who lost jobs in
the hard-hit hospitality industry. Ms. Fichuk said their
customer-service skills make those workers good fits at call
"We are seeing a lot of momentum," she said. "There's still
decreased employment in some areas, but there are plenty of pockets
Write to Eric Morath at firstname.lastname@example.org
(END) Dow Jones Newswires
September 17, 2020 05:44 ET (09:44 GMT)
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