Jobless claims dip — outlook remains grim
Another 1.5 million Americans filed for unemployment benefits last week, the Department of Labor said Thursday.
That figure, a modest drop from the week before, follows a pattern of declines in the number of new claims as the economy lurches toward reopening.
Still, the numbers remain astronomical, even when compared with previous recessions. Economists caution that while joblessness seems to be improving, the economic situation remains dire and far from a full recovery.
“There genuinely are fewer people filing for unemployment,” Irena Asmundson, chief economist at the California Department of Finance, said. “But those numbers are still
historically high.”
She noted that during the 200709 recession, the highest number of unemployment claims filed in one week was 695,000. Now, the numbers in the weekly report remain above a million.
“Things do look like they’re getting better, but things are still terrible,” she said. “A lot of people are still affected by this.”
Many jobs, like those in restaurants, retail and some kinds of office work, may take years to come back.
“When the economy begins to open back up again, probably half those jobs will come back,” Nicholas Bloom, a senior fellow at the Stanford Institute for Economic Policy Research, said. “But nowhere near all of them, because there’s more people working from home, there’s less money around, there’s less going out.”
“We wouldn’t start recovering really until there’s more people being hired than being laid off,” Asmundson said. “And we’re nowhere close to that right now.”
In California, 312,791 unemployment claims were processed last week, the state Employment Development Department said. Those numbers differ slightly from the federally reported figures, in part because they include Pandemic Unemployment Assistance benefits available to the selfemployed and business owners. Since March 16, the department has paid $30 billion in benefits, which include a mix of state and federal funds.
Among the recipients is Randy Reiss, who has worked as a contractor for the past 3½ years, managing projects, doing things like negotiating deadlines and plans for “digital experiences and ecommerce stores.” He normally moves among companies frequently, either as a temporary employee or contract worker, depending on the length of a gig. His last contract, with Google, ended in December, and he’s been on unemployment while searching for his next gig since then.
Reiss usually receives unemployment benefits between contracts, but since the pandemic hit, finding that next opportunity has proven difficult. While he had a few interviews this year, those calls quickly dried up.
“It’s been tough to land something ever since,” he said.
He added that while people in his field still seem to be hiring, the field has grown with the addition of newly laidoff Bay Area employees. This means that there’s a new group of competitors he didn’t have before.
“Before things got really bad, it’s just finding the right fit is sometimes difficult,” he said. But since the pandemic hit, “there’s more candidates looking.”
As companies of all sizes are starting to make temporary layoffs and furloughs permanent, the number of job openings is also historically low, according to Julia Pollak, a labor economist at ZipRecruiter.
“Since midFebruary, job postings have fallen by about 47%,” she said. “They were ticking up the last three weeks, but then dipped again last week.”
The reason for the dip is unclear, but it could be a sign that the recovery is still fragile, she explained.
Since late March, 45.7 million unemployment claims have been filed. Some of those workers have been rehired or found other jobs: As of June 6, 20.5 million people were continuing to collect benefits.
New claims provide a clearer picture of the current state of the labor market than the monthly unemployment rate, which will be released Friday, Stanford’s Bloom said, noting that the number of claims is still pretty grim.
“I think the true state of the labor market is that there has been some improvement, but not as much as the data to come on Friday might suggest,” he said.
In July, the expanded unemployment benefits authorized under the Cares Act are set to expire.
“I think policymakers have a difficult decision to make going forward about what kind of assistance to extend to job seekers,” Pollak said. “Should the expanded benefits expire all at once in July, even though the number of job openings has fallen dramatically and there aren’t enough jobs to absorb all of the unemployed workers? Or should they scale them back slightly?”