About 840,000 people filed for state unemployment benefits last week, the Labor Department announced Thursday, a small decline from the week before but 20,000 more than analysts had expected.
Another 464,000 Americans applied for benefits through the Pandemic Unemployment Assistance program, the federal program that covers gig workers and the self-employed, bringing total unemployment aid applications to 1.3 million.
“The level of claims is still staggeringly high,” said economist Daniel Zhao of Glassdoor. “We’re seeing evidence that the recovery is slowing down, whether it’s in slowing payroll gains or in the sluggish improvement in jobless claims.”
Settling in at a high level: One reason layoffs have remained so high week after week is that some companies try to hang onto workers as long as they can in order to be ready when the economy picks up again. But as the recession drags on, employers give up and start shedding employees.
“Some of these new layoffs are coming from firms that didn’t want or didn’t have to lay people off at first,” Constance Hunter, chief economist at KPMG, told the Associated Press. But as the recession hits the six-month mark with no end in sight, “they have no choice but to start reducing their workforce.”
Significant churn: The ongoing layoffs, at levels higher than seen during the worst of the Great Recession, are contributing to enormous churn in the labor market, which is also recording substantial gains, as evidenced by the monthly job reports.
“Companies are continuing to rehire workers as they reopen, even as other companies cut jobs in response to still-depressed demand for goods and services,” said Ben Casselman of The New York Times. “The result is a job market that is being pulled in two directions at once — and economic data that can appear to tell contradictory stories.”
Millions still receiving benefits: The number of people receiving state benefits fell by roughly 1 million, down to about 11 million, and the number receiving benefits through the federal PUA program fell by about 400,000, down to 11.4 million. Once all of the insurance programs are accounted for, about 25.5 million people are receiving unemployment aid.
Add in the people who are still waiting to receive their benefits or hear about the status of their applications and the number rises to over 26 million, says Heidi Shierholz of the Economic Policy Institute (see the chart below). Shierholz cautions, though, that the data is far from perfect, and is almost certainly distorted by backlogs, double-counting and fraud. “All this means nobody knows exactly how many people are receiving unemployment insurance benefits right now,” she said, “which is another reminder that we need to invest heavily in our data infrastructure and technology.”