Unemployment claim up on COVID slowdown
The financial consequences of the on-again, off-again shutdown of the American economy were demonstrated yesterday when the Department of Labor reported that first-time claims for unemployment rose for the first time in four months, a little over expectations. A total of 1.4 million workers filed for claims this week.
“The weekly first-time claims peaked at 6.9 million in the last week of March and fell continuously until last week, when the trend reversed,” says CNN Business. “Economists had predicted claims would remain steady this week at 1.3 million, the same amount as in last week’s report.”
Fears of a resurgent virus outbreak in places like California, Texas and Florida contributed to the joblessness and highlighted how the economy remains in flux from the coronavirus.
“Some news was less dire. Continued claims, which count people who have applied for benefits for at least two consecutive weeks, slipped to 16.2 million, down by more than 1 million from the week prior,” says CNN.
The new jobless numbers make it easier for some Republicans to support another round of stimulus checks to help Americans bridge the gap while the economy stays in limbo due to COVID worries.
The numbers also bolster the case for extending unemployment benefits. Some in the GOP were pushing for enhanced unemployment benefits to end when the benefits expire at the end of the month. That looks unlikely now.
Trump Treasury Secretary Steven Mnuchin told CNBC that Senate Republicans agreed to a White House proposal to target unemployment benefits at a 70 percent replacement wage for the unemployed.
Previously, “enhanced” unemployment benefits due to COVID came under attack because they provided an incentive to remain unemployed by paying recipients more money to be unemployed than to work.
Senate Republicans will now have to work out the details with the Democrat-controlled House, which has proposed considerably more generous benefits for unemployed workers.
Previously, the House Democrats proposed to extend “enhanced” unemployment until the end of the year.
Republicans have resisted the idea because research tends to show that unemployment benefits extend joblessness in the economy.
“Most people receiving unemployment want a job but can’t find one yet. But many employers say $600 unemployment benefit add-on keeps some from going back to work. We need a new structure that helps those who can’t find work yet, but doesn’t discourage anyone from returning to work,” tweeted Senator Marco Rubio (R-FL).
“Congress faces pressure to pass an aid package, as Covid-19 case and death counts rise around the country and the critical extra $600 per week unemployment benefit expires at the end of the month,” says CNBC.
In an election year, both parties are likely to spend heavily to try to keep voters happy.
President Trump proposed a payroll tax holiday as part of the stimulus package, but Republicans say it’s a non-starter with House Democrats.
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