Jobless claims drop as governors cut off aid

WASHINGTON >> The number of Americans seeking unemployment benefits fell last week to 473,000, a new pandemic low and the latest evidence that fewer employers are cutting jobs as consumers ramp up spending and more businesses reopen.

The decline — the fourth in the past five weeks — coincides with a rash of states led by Republican governors that have blamed expanded jobless benefits for a slowdown in hiring and are acting to cut off the additional aid.

Thursday’s report from the Labor Department showed that applications declined 34,000 from a revised 507,000 a week earlier. The number of weekly jobless claims — a rough measure of the pace of layoffs — has fallen significantly from a peak of 900,000 in January.

Last week’s unemployment claims marked the lowest level since March of last year, when the viral pandemic erupted across the economy. The decline in applications is coinciding with a steadily improving economy. More Americans are venturing out to shop, travel, dine out and congregate at entertainment venues. The reopening has proceeded so fast that many businesses aren’t yet able to staff up.

In April, employers added 266,000 jobs, far fewer than expected. The surprisingly tepid gain raised concerns that businesses may find it hard to quickly add jobs as the economy keeps improving and that regaining pre-pandemic employment levels could take longer than hoped.

In Thursday’s report on jobless claims, the government said nearly 16.9 million people were receiving unemployment aid during the week of April 24, the latest period for which data is available. That is up from 16.2 million in the previous week and suggests that hiring wasn’t strong enough last month to pull people off unemployment.

The rise in unemployment recipients occurred mostly in California and Michigan, where more than 600,000 people were added to the federal jobless benefit program for gig workers and contractors.

The hiring slowdown has led to a political backlash against several federal expansions to unemployment benefits, including an extra $300 in weekly benefits paid for by the federal government, on top of state payments that average about $320. The supplement was part of President Joe Biden’s $1.9 trillion stimulus, approved in March, and expires the week of Sept. 6.

But so far, 12 states — all with GOP governors — have announced that they will stop paying the extra benefit as soon as June or July. In Tennessee, Gov. Bill Lee said the state will stop issuing the payment July 3. In Missouri, Gov. Mike Parson said it will end June 12.

The 12 states will also end their participation in two federal benefit programs: One that has made gig workers and the self-employed eligible for assistance for the first time, and a second that provides extra weeks of aid. Together, those programs cover 12.5 million people nationwide.

Businesses have cited the extra $300 as a reason they are struggling to hire. An analysis by Bank of America economists found that people who had earned up to $32,000 in their previous jobs can receive as much or more income from jobless aid. Some unemployed people say the extra benefit allows them to take more time to look for work, which can make hiring harder.

THE ASSOCIATED PRESS Richard Lavers, deputy commissioner of New Hampshire Employment Security, at a New Hampshire Works employment security job center Monday in Manchester, N.H. States are pushing the unemployed to get back to work to help businesses large and small find the workers they need to emerge from the COVID-19recession.