This statement was published in response to the July 22, 2021 release of jobs numbers by the Bureau of Labor Statistics. For the most up-to-date data please visit TCF’s comprehensive UI data dashboard here.


Today’s Labor Department report underscores the long distance remaining to a full jobs recovery. The pace of new unemployment claims has plateaued around 500,000 per week, coming in at the still sizable level of 516,000, including 406,000 state (up 14,000 NSA) and 111,000 PUA (up 14,000 NSA) for the week ending July 17. The emergence of the Delta variant threatens the labor market recovery, as businesses in hard hit areas could be forced to curtail operations and shed positions if new restrictions are needed.

The more immediate challenge is what will happen to the nearly four million workers whose unemployment benefits have been cut off early. So far data has flatly rejected the notion that these workers would move quickly to open jobs.

  • Economist Arin Dube analyzed the most recent Census Bureau data and found that 2.2 percent of adults in these states stopped receiving benefits, but the percentage of workers in these states that were employed actually declined by 1.4 percent.
  • Similarly, Peter Ganong of the University of Chicago analyzed last Thursday’s state employment report and found no statistical difference in the change in payrolls between May and June in states that had cut off aid and states that did not.

The same trend can be seen in today’s data as well. Since cut-offs went into effect last month, claims for state benefits actually fell faster in states that kept the $300 (down 4.3 percent) than they did in states that had eliminated the extra aid by July 3 (down 3.9 percent).

Despite these cut-offs, there are still a whopping 12.6 million workers making ongoing claims benefits. These totals inched downward again last week, even though claims for state benefits ticked up 106,000 NSA, from 3.1 million to 3.2 million. Not surprisingly, pandemic benefit caseloads are declining even more quickly, with PUA pushed down by 553,000 to 5.1 million and PEUC declining by 576,000 to 4.1 million last week. While these caseloads have dropped by more than one-third since their peak at the end of February (19.9 million), it is inconceivable that they will reach reasonable levels by the time benefits are cut off on September 6.

The elimination of this aid will quickly erode the financial health of millions of American families and has the potential to take the wind out of the sails of our economic recovery. And, if recent data holds up, the end of benefits won’t lead to a dramatic increase in employment. While the U.S. has already invested historic sums in—and political capital on—unemployment aid, that does not change the fact that the jobs recovery is going to take longer than policy makers seem prepared to wait. Congress should include further reforms to unemployment insurance in the emerging budget reconciliation package being developed.