New unemployment claims spike

COVID relief necessary, especially with expanded benefits set to expire

Danny’s Tavern, a beloved Chicago bar in the Wicker Park neighborhood, recently announced is was closed for good. (Facebook)

By Ted Cox

Jobless claims by newly idled workers spiked last week, according to figures released Thursday by the U.S. Department of Labor.

The Labor Department’s weekly unemployment report found that, adjusted for the usual seasonal fluctuations, 853,000 newly idled workers filed for benefits last week, a jump of 137,000 from the previous week’s revised total of 716,000. The department stated that seasonal projections had expected a rise of under 100,000. Unadjusted, however, the news was even worse, with almost a million jobless workers filing, 948,000, an increase of 229,000, or almost a third, from the previous week.

Illinois wasn't spared, as 106,000 filed for benefits in the state, up from 74,000 the week before. Claims for expanded federal benefits for the self-employed, freelancers, and so-called gig workers under the Pandemic Unemployment Assistance program also rose to 26,000 from 16,000 the week before. Nationally, 428,000 people applied for PUA benefits.

Gov. Pritzker has recently spoken about rampant fraud in unemployment filings, in Illinois and across the nation, but it’s unclear just how many of those initial claims are fraudulent. According to the Illinois Department of Employment Security, it has already identified 341,000 fraudulent claims.

Yet the new increase in claims, after the pandemic low of the previous week, is sure to goad Congress to continue to work to pass an additional coronavirus relief package, especially as an extended 13 weeks of benefits and and the PUA program are set to expire before the end of the year.

The New York Times quoted Daniel Zhao, senior economist for the career site Glassdoor, as saying: “It’s very clear the third wave of the pandemic is causing businesses to have to lay people off and consumers to cut back spending. It seems like we’re in for a rough winter economically.”

The 716,000 who newly filed the week before was a pandemic low, while still above the pre-COVID record of 695,000 new filings in a week set during the 1982 recession. The new spike toward 1 million, however, a weekly figure not reached since July, scuttles hopes for a stronger recovery.

The Times reported that “hiring slowed sharply in early November and that some of the sectors most exposed to the pandemic, like restaurants and retailers, cut jobs for the first time since the spring. More up-to-date data from private sources suggests that the slowdown has continued or deepened since the November survey was conducted,” finding a 6.7 percent unemployment rate nationally for November.

The Labor Department stated that, for the equivalent week a year ago, there were 317,866 initial claims filed. It estimated that 19 million workers were on some for of unemployment insurance nationally, down 1.1 million from the previous week, but still well above the 1.5 million drawing benefits nationally a year ago.