This statement was published in response to the October 22, 2020 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 is another stark reminder of the continued economic overhang caused by the unrelenting COVID-19 pandemic. Last week, 1.1 million workers filed new unemployment applications—the 31st straight week that total new claims were over one million. While the decline in initial state claims has brought (unadjusted) new applications to their lowest level during the pandemic, they are still nearly double the rate historically associated with a declining economy (400,000). The steady improvement in economic indicators over the summer has lulled policymakers into a dangerous complacency. Against an illusion of a robust recovery, leaders in D.C. have pulled the plug on economic aid far too soon and too drastically.
The news from continued claims appears more encouraging at first glance, as both state continuing claims (8 million) and PUA (10.2 million) were down this week, by 11 and 4 percent, respectively. However, the decline in state benefits is largely made up for by a major uptick in PEUC extended benefits, which increased by 510,000 this week and are up 1.3 million from two weeks ago. Yet increased PEUC numbers still represent an undercount, as today’s report does not include 600,000 PEUC recipients in Florida listed on the state’s dashboard, as well as workers in major states like Washington and Texas who report delays of up to one month between programs.
Significantly, the 3.3 million workers collecting PEUC as of October 3 will run out of their 13-week extension on or before December 26th, the final week covered by the program. If Congress remains unable to push past this deadline, it will mean the fewest weeks of extended benefits provided since the 1980s recession, including far less severe recessions such as 2001, when more weeks of aid were provided. In fact, it would be the first time since 1949 that additional emergency unemployment benefits were not provided when the unemployment rate was this high.
This report further shows that Congress has left millions of workers dislocated by the pandemic hanging by a thread. As many as eight million Americans may have fallen into poverty because of the expiration of the CARES Act programs. Payouts from unemployment have plummeted from $25 billion to $6 billion per week as the air has been taken out of the pump priming the economy. Speaker Pelosi should be commended for continuing to press ahead with negotiations with Secretary Mnuchin, despite headwinds from the election, President Trump and Senate Republicans. The need for lifesaving aid and economic stimulus has never been clearer.