The number of new jobless claims last week was 1.4 million, the Labor Department reported Thursday, which is higher than the prior week’s claims of 1.3 million.
Thursday’s report marked the first weekly increase in jobless claims since the end of March, when new applications peaked at 6.9 million, a troubling sign of danger for the economic recovery.
The uptick in jobless claims comes as some states have reversed reopening plans for their economies. Coronavirus hot spots had the highest number of claims. For the week ending July 11, claims were over 65,000 in Florida, more than 33,000 in Georgia, and roughly 20,000 in California.
On top of these are the nearly 1 million new claims for the $600 Pandemic Unemployment Assistance for the week ending July 18, an increase of nearly 20,000 from the prior week.
The assistance goes to those receiving regular unemployment benefits and to those who are normally not eligible for unemployment relief, such as self-employed workers or people seeking part-time work. The assistance was created by Congress in the March CARES Act relief bill and is scheduled to expire by the end of the month.
Many jobless workers receive the $600 weekly pandemic relief payment on top of their regular unemployment benefit. The last day to apply for the assistance is July 25. Barring an extension of the program, jobless workers will now collect roughly a third of what they previously received.
On average, unemployment benefits across the country were $385 per week in February 2020, according to the House Ways and Means Committee. When combined with the added benefit, jobless workers received nearly $1,000 a week.
The Democratic-led House in May voted to extend the $600 payment through January of 2021. The Republican-led Senate is not expected to take up that bill, but was in discussions with the White House to provide a short-term extension at a lower dollar amount.
However, negotiators on Wednesday decided against pursuing a short-term extension.
“We’re really trying to look at trying to make sure that we have a comprehensive bill that deals with the issues. Any short-term extensions would defy the history of Congress, which would indicate that it would just be met with another short-term extension,” said White House chief of staff Mark Meadows.
A longer-term solution for the payment is now tied to the coronavirus relief package that the Senate is expected to release later today.
The Senate’s inaction on providing relief to unemployed workers is adding “financial injury” to the economy, according to Mark Hamrick, a senior economic analyst at Bankrate.com.
“It is adding insult to financial injury that the next round of relief legislation has yet to be passed in Washington. The hang-up appears to be focused in the Senate and among Republicans specifically,” he said.
The $600 payment has come under fire by congressional Republicans because many workers who receive the benefit get more from unemployment than they did at their prior job.
The American Action Forum, a right-leaning think tank, found that, nationally, 63% of workers currently make more on unemployment with the enhanced supplement than they would working, but even if the supplement is reduced to $100 a week, 25% of the U.S. workforce could still make more on unemployment than returning to work.
