Jobless claims skyrocket, layoffs up

State filings top 100,000 again, labor market remains wobbly

Unemployment claims jumped last week and topped 100,000 again, government officials reported Thursday, in a sign the statewide job market has yet to shake off the economic ailments the coronavirus has unleashed.

California workers filed about 104,400 initial claims for unemployment last week, a sharp increase from the 58,200 jobless claims filed the week before, the U.S. Labor Department reported.

“The number of unemployment claims is up from the previous week, which was artificially low, but well below the weekly numbers of the previous two months,” said Michael Bernick, an employment attorney with law firm Duane Morris.

The increase in California comes as the state Employment Development Department continues to struggle to pay benefits to unemployed workers in a timely fashion due to the agency’s broken call center and archaic computer systems.

“I expect that when the virus goes down, the jobless claims will go down,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.

Unemployment claims have poured into the EDD’s offices in record numbers after workers suffered huge layoffs due to business shutdowns mandated by state and local government agencies.

Some signs of recovery in the job market have appeared sporadically as government officials

have gradually allowed some businesses to resume operations.

“We will continue to reopen slowly, which will allow some people to get back to work,” Levy said.

Nationwide, jobless claims dropped sharply, declining by 33,000 to a new level of 779,000 claims for the week ended Jan. 30, according to the report. The U.S. numbers were adjusted for seasonal variations.

California continues to generate a high share of the nation’s jobless claims considering the size of the statewide labor force. During the week ending Jan. 30, California accounted for 12.8% of jobless claims filed in the entire country — even though California’s labor force is only 12% the size of the national labor pool.

One bright spot in the dark tapestry of California’s tattered economy: Despite last week’s jump in jobless claims, unemployment filings have been trending lower lately.

Using a four-week moving average to smooth out short-term volatility in the unemployment numbers, jobless claims have decreased five weeks in a row.

Nevertheless, California’s jobless claims remain at an elevated level.

During the 11 months of coronavirus-linked business shutdowns ordered by state and local government agencies, initial jobless claims in California have been above 100,000 every week except for one — the week ending Jan. 23. Put another way, weekly unemployment claims have been above 100,000 during 44 of the last 45 weeks going back to mid-March.

Still, Levy hopes that the recent weeks could be telling a truer picture of the layoff trends in California because the EDD has slowly begun to take steps to uproot fraudulent claims before they gain a foothold in the agency’s system.

“I suspect the EDD is getting better at weeding out the fraudulent claims,” Levy said. “The numbers are going to be more real.”

If those EDD efforts gain traction, that could block many claims before they even show up in the official statistics.

What appears certain is that the job markets in the Bay Area and California have a long way to go before they can fully recover to where they were in February, before the business shutdowns began. Hotel and restaurant workers face particularly bleak prospects.

“It’s going to take some time for people to get their jobs and income back,” Levy said, “It will take a while for people to feel confident enough to go back to a hotel or a restaurant.”