Latest unemployment insurance report shows economic crisis continues
San José, CA – The weekly report on Unemployment Insurance (UI) claims issued on Thursday, September 17 by the U.S. Department of Labor showed that the economy continues to struggle. Seasonally adjusted new claims for regular state unemployment insurance fell by 33,000 to 860,000 for the previous week ending September 12. This number is still about four times the weekly claims number in February, when the recession began. It is also above the high mark for claims before this recession, which dates back to October 1982.
Continuing claims, which measures the number of people receiving regular state unemployment insurance benefits, fell by much larger number, dropping 916,000 to 12.6 million for the week ending September 5. But much of this drop was because the surge in unemployment insurance claims began in March, when travel, hospitality, and restaurants began to cut back because of the COVID-19 pandemic.
The broadest measure of unemployment insurance rose by 98,000 for the week ending August 29, to a total of 29.8 million. This number includes the regular state unemployment benefits, the federal Pandemic Unemployment Assistance or PUA for gig workers and the self-employed, the federal Pandemic Emergency Unemployment Compensation or PEUC and the state Extended Benefits program, both which aid those who have run through the six months for regular state unemployment.
Other signs that the economy continues to slow emerged this week. On Wednesday, the government report on retail sales for August saw a gain of only six-tenths of one percent. This was just more than half of what most economists expected, and a drop from August’s increase. But this was not unexpected, given the expiration of the $600 a week in additional unemployment insurance benefits.
Trump’s executive order granting an additional $300 week has also ended after only five weeks. While many states are still making retroactive payments, they will run out soon, leaving almost 30 million people high and dry.
Another sign of weakness was that new construction on homes and apartments fell 5.1% in August, led by a big decline in apartment construction projects. This is no surprise as more and more people are being evicted, despite a moratorium issued by the Centers for Disease Control. The big problem with the CDC order is that the federal government is not providing any money for rent relief. A better approach has been proposed by Representative Ilhan Omar of Minnesota, who call for rent forgiveness for tenants hit by the recession, and government aid to landlords who commit to more protection for their tenants.