Unemployment numbers may disguise a problem
Decline fails to count thousands who have quit looking for work
Initial unemployment claims in Florida took a surprising sharp decline last week, but the bounce in numbers overlooks the thousands of people who remain jobless and perhaps have quit looking for work.
State applications for the week ended Oct. 17 dropped to 35,960, down by 25% from the 47,900 claims recorded in the previous week, according to data released by the U.S. Department of Labor on Thursday. The total reversed two straight weeks of increases that reinforced economists’ beliefs that the COVID-19 recovery is slowing.
Nationally, there were 787,000 new jobless claims for the week, a decline of 55,000 from the previous week’s revised level. Although the results were below 1 million for an eighth consecutive week, the level still handily exceeded the pre-pandemic one-week record of 671,000 in 1982.
The majority of U.S. states reported declines with Florida, Georgia, New York and California reporting significant decreases in claims. Texas, Massachusetts and Virginia reported notable increases in new claims.
The peaks and valleys in weekly claims disguise the numbers of people who continue to remain out of work and still receive some form of financial assistance from their states or from federal programs that remain in force.
Those whose state benefits have run out, for example, have the opportunity to file for additional weeks under a federally funded program. Although the state and national economies are adding back jobs taken away by the pandemic, economists note that businesses are not recalling anywhere near the number of workers they have furloughed in recent months.
“It is difficult to know exactly how many individuals are no longer qualifying for jobless aid and how many are going back to work when looking at these numbers alone,” said Mark Hamrick, senior economic analyst for Bankrate.
“What we can see is that there is a total of more than 23 million Americans receiving some form of assistance in the latest week,” he said.
Despite the declines in claims, economists have noted that hundreds of thousands of people have simply left the labor force nationwide — meaning they quit looking for-jobs—as-hiring-has-slowed considerably. That’s why the U.S. jobless rate declined from 8.4% in August to 7.9 % last month, economists for PNC Bank of Pittsburgh asserted in a report released earlier this month.
“The [ jobless rate] decline was for the wrong reason,” the economists said. “Nearly 700,000 workers dropped out of the labor force in September, with nearly 90% of those leaving the labor force women. This partly reflects care-giving responsibilities that disproportionately fall to women as the pandemic keeps schools remote and reduces services for the elderly and disabled.”
The lower jobless rate also reflects the lopsided composition of September’s job growth, PNC economists said
The private sector added a net 877,000 jobs in the month, while government employment — including schools — fell 221,000. Public and private education employment fell a collective 349,000 in September.
Retail hiring slowed at big-box stores, while temporary help agencies also signed up fewer people.
As of Tuesday, the Florida Department of Economic Opportunity has paid 2,054,095 people a total of $17.5 billion in state and federally funded benefits.