San José, CA – The latest weekly report on new applications for regular state unemployment insurance showed an unexpected increase in new claims. The Department of Labor, on Thursday, September 24, said that there were 870,000 people who filed for state unemployment benefits in the week ending September 19, up slightly from 866,000 the week before. However, most economists expected a sizable drop to 850,000.

While the weekly reports are far below the weekly reports of late March and early April which topped 6 million, it is still above the highest number before the current recession and shows that the layoffs are continuing at a high rate.

While the number of continuing claims, or people actually collecting state unemployment insurance, dropped by a 167,000 in the week ending September 12, much of this might be because more and more people being dropped for having run out the six months of unemployment insurance benefits. The surge in applications began six months ago, less one week, so we could see a dramatic drop in the numbers, not because they are finding jobs, but because they are being dropped from the program.

Another sign that people are running out of aid is the continued rise in the Federal Pandemic Emergency Unemployment Compensation or FPEUC, which adds an addition three months of benefits. The existing Extended Benefits program, which kicks in with a three-month extension in states with high unemployment rates, also has been growing. Combined, the two grew by about 164,000 in the week ending September 5, an increase of almost 10% from a week earlier.

On factor weighing on the economy is the expiration of the $600 a week in additional unemployment insurance benefits in late July. Trump’s replacement program of $300 a week has already ended after only five weeks, although not everyone has been paid.

With the onset of colder weather limiting outdoor businesses, and the continued spread of COVID-19, the environment is also turning against the job market.

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