The U.S. unemployment rate has been utterly dreadful since the COVID-19 pandemic first took hold, plunging the economy deep into a recession. Last week, there was some encouraging news on the unemployment front, when weekly jobless claims came in below 1 million for the first time since March. But this week, things took a turn for the worse.
The U.S. Department of Labor has reported that for the week ending Aug. 15, jobless claims came in at 1.106 million. It also revised its total number of claims from the previous week from 963,000 to 971,000.
Economists were initially hopeful when they saw that new weekly jobless claims had dipped below the 1 million mark, but this week's data gives us an unwanted reality check -- that we're still a long way from economic recovery, and that the need for boosted unemployment is imminent.
Jobless workers need help
Earlier in the year, workers collecting unemployment were privy to a $600 weekly boost to their benefits, thanks to the CARES Act. That $600 boost, however, expired at the end of July.
Now, lawmakers have been working to come to terms on a second COVID-19 relief package to follow the CARES Act, but so far, they've reached an impasse, with boosted unemployment being the most notable sticking point. Democrats want to see a $600 weekly boost upheld through the beginning of 2021. Republicans feel that an extra $600 a week is too high and will discourage unemployed workers from seeking out new jobs. They've proposed a $200 weekly boost through September, after which time, unemployment benefits would replace 70% of jobless workers' lost wages.
In the meantime, President Trump is seeking to help the jobless stay afloat financially. Earlier this month, he signed an executive order calling for a $400 weekly boost to unemployment. But in practice, that will really amount to just a $300 weekly bump, because the president was initially looking to have individual states fund a portion of that boost, and many don't have the financial means to do so.
Of course, a $300 boost is better than nothing, but it may be short-lived. That boost is only available in states that are approved for Federal Emergency Management Agency (FEMA) funding. A handful of states have already applied and gotten approval, but since funding is limited, states are initially being granted just three weeks' worth of aid -- which means there's no guarantee jobless workers will get that extra money once those three weeks run out. Also, some unemployed workers won't be eligible for that $300 boost at all, because currently, it's not available to those collecting under $100 a week in jobless benefits.
If lawmakers manage to come to terms on a second COVID-19 relief package, it could set the stage for a steadier stream of boosted unemployment for a longer time frame. But right now, they seem to be deadlocked, which, unfortunately, is only hurting the public.