Jobless Claims Jump Even as Some States Ease Coronavirus Restrictions
Unemployment claims rose unexpectedly this week. What does that mean in terms of additional aid?
The U.S. unemployment rate reached a record high 14.7% back in April 2020, when the early impact of the coronavirus pandemic hit hard. Since then, the jobless rate has slowly but steadily declined, and this February, it sat at 6.2%.
But first-time unemployment claims came in higher than expected this past week. For the week ending March 13, 770,000 new jobless claims were made. That's 70,000 higher than the 700,000 new claims economists were projecting. It's also higher than the 725,000 new claims that came in the week prior.
Of course, it's not so crazy to think jobless claims might fluctuate, for better or worse, before they eventually taper off to pre-pandemic levels. But what is surprising is that this latest uptick in claims comes as many states pull back on coronavirus restrictions. Texas, Florida, and Mississippi, for example, all eased up pandemic-related constraints despite warnings from health officials.
Is the U.S. economy on its way to recovery?
Many experts are hopeful that as coronavirus vaccines are rolled out, restrictions will gradually ease and jobs will eventually increase. But this past week's unemployment numbers should serve as a much-needed dose of reality. We still have a ways to go before the jobless rate returns to pre-pandemic levels.
The good news is that the recently passed $1.9 trillion coronavirus relief bill includes boosted unemployment benefits through early September. Those filing a jobless claim will be entitled to an extra $300 a week on top of their state benefits. That increase will help many workers, especially lower earners, replace the bulk of their missing paychecks -- at least until early September. But what happens once that aid runs out is anybody's guess.
Will Americans be in line for more relief?
The latest $1.9 trillion aid package offers a host of relief for the public. On top of boosted unemployment benefits, it includes an enhanced Child Tax Credit, expanded health insurance subsidies, rental assistance, and a round of $1,400 stimulus checks. Many checks have already landed in recipients' bank accounts.
At this point, it's too soon to start making plans for a follow-up relief bill. But if the jobless rate doesn't steadily decline, there could be the case for additional aid. We'll see how things look when key provisions like boosted unemployment come up for expiration.
It may be disheartening to see jobless claims come in higher than analysts predicted. But that increase could be more of a temporary blip. It doesn't necessarily mean that we should all lose hope of a widespread economic recovery. It may be some time until unemployment claims follow a stable, predictable downward path. The silver lining is there's a nice amount of aid for the jobless to go around, at least for the time being.
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