This statement was published in response to the May 6, 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 unemployment report shows the benefits of a strengthening economy and the critical role that unemployment aid has played in digging us out of the COVID crisis. As the economy has revved up, new unemployment applications are slowly coming back to earth. New claims fell for the 4th consecutive week, falling to 606,000 after a big decline in state claims (505,000, down 107,400 last week) and a smaller drop in PUA initial applications (101,000, down 21,000 last week).

Despite the declines in claims, political leaders like the governor of Montana have concluded that generous federal unemployment benefits are holding back the economic recovery, and in the case of Montana are backing out of successful federal programs or in other cases complaining about them. But a deeper dive into the data released today doesn’t back up the argument that unemployment benefits are hindering employment or economic growth.

In the 13 states with the lowest unemployment rates, continued UI claims across all programs are down 26 percent since their 2021 peak on February 20. In contrast, in the 13 states with the highest unemployment rates, claims have only declined by 17 percent. In other words, when the labor market recovers and job opportunities abound, workers will exit UI benefits for available jobs. For example, in Alabama, where the average UI benefit is $583 per week (including $300 from FPUC), UI claims have declined 31 percent in an economy with an unemployment rate of 3.8 percent. In neighboring Louisiana, where benefits are $488, claims have dropped only 4 percent in an economy where the tourism slump has left the state with an unemployment rate of 7.3 percent. It’s the jobs climate, not UI benefits, which are driving the pace at which Americans return to work.

Cutting off unemployment benefits early would undermine that economic progress and cause needless personal suffering. There are still 16 million workers filing a continuing claim for unemployment benefits. This includes 3.8 million on state benefits, which inched up 2,500 last week after declining for five consecutive weeks to a pandemic low. There are 5.0 million on PEUC (down 221,000) and 6.9 million on PUA (down 112,000), the second straight week of decline in these large federal programs still covering nearly 12 million Americans. It will take many months of economic recovery, vaccine progress, and rebuilding of the child care infrastructure before these workers are able to find suitable work. Until then, enhanced unemployment benefits will not only sustain jobless families, but continue to power a robust recovery through greater consumer spending. Congress was right to continue these benefits through September, and should be sure to maintain that aid until the barriers to job seeking are removed.