Unemployment claims in state decline sharply

Workers’ first-time filings fall to just under 124,000, lowest in 10 months

Initial unemployment claims in California last week fell to their lowest level in 10 months, a federal report released Thursday shows, marking a rare bright spot for the state’s economy while the coronavirus rages.

An estimated 123,970 California workers filed first-time jobless claims last week, down 58,655 from the prior week, the U.S. Labor Department reported.

That’s the lowest number of initial unemployment claims since March 14, which marked the beginning of coronavirus-linked business

shutdowns ordered by state and local government agencies to combat the spread of the deadly bug.

The decrease in firsttime jobless claims last week also represented the largest weekly decline in unemployment filings for California since May 9, when claims dropped by 103,590.

Unemployment claims in the United States totaled 900,000 for the week that ended on Jan. 16, down 26,000 from the claims that were filed in the week ending Jan. 9.

Despite the improvement in the claims numbers, economic analysts believe California’s economy isn’t close to recovering from the mammoth job losses unleashed by the coronavirus.

The ongoing business shutdowns appear likely to curb employment gains and economic activity in the Bay Area and California, according to Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state Employment Development Department.

“There is no indication of any significant pick up in a return to work by employees, to say nothing of new hires,” Bernick said.

A review of the official notices posted by the EDD points to a new surge in layoffs conducted or being planned by hotels, resorts, restaurants, retailers and fitness centers.

“More firms are finding that they can’t keep staff on the job with the renewed lockdowns,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.

Still, a moving average of unemployment claims — a tool for analysis that smooths out the volatility in the weekly numbers — shows the trend in recent weeks points toward a decrease in the number of first-time jobless claims.

Over the four-week period that ended on Jan. 16, claims averaged about 159,100 a week. That was down about 8,700 from the average for the four weeks that ended on Jan. 9, according to this news organization’s analysis of the figures posted by the Labor Department.

Plus, California is finally starting to account for a smaller percentage of all of the unemployment claims filed nationwide.

Comparing numbers that weren’t adjusted for seasonal variations, California accounted for just 12.9% of the claims filed nationwide. The prior week, California’s share was 16.4%. Two weeks ago, California had 17.5% of all the jobless claims filed in the United States, using unadjusted estimates.

Nevertheless, California’s employment picture remains far grimmer now than it was before the government-mandated business shutdowns began in early March.

The mandates triggered layoffs of workers and chased away customers from merchants, hotels, airlines, salons and countless other businesses.

The nearly 124,000 unemployment claims filed for the week that ended Jan. 16 is nearly three times as many as the weekly average for January and February of 2020, the two months that preceded the start of the business shutdowns.

“There is no short-term turnaround in sight,” Levy said.