The Labor Department reported that 14,000 people were claiming unemployment. Since January 1, when the weekly count was at 900,000.000, it has been steadily declining.
The COVID-19 vaccines have helped the job market by encouraging businesses and consumers to return their favorite restaurants, bars, and shops to reopen hours or expand. Employers across the country are responding by increasing their hiring to meet increased consumer demand. The economic outlook is still clouded by a resurgence in cases linked to the highly contagious Delta variant.
Since long, jobless aid applications have been considered a measure of the health of the labor market. However, their reliability has decreased since the pandemic. Many states have seen weekly figures that are exaggerated by fraud and multiple filings by unemployed Americans trying navigate bureaucratic obstacles to get benefits. These complications explain why applications are still being filed at an unusually high rate despite the fact that there is a lot of hiring.
Since the pandemic that paralyzed economy last year, the job market has been recovering. Employers have cut 22 million jobs between March and April 2020. Since then, the nation has recovered 16.7 millions jobs. Economists estimate that Friday’s August jobs report will show that employers added 750,000 jobs last month. The number of job openings posted — record 10.1 millions in June — has been increasing faster than the number of applicants who have lined up for them.
Many of those still unemployed could face financial hardship next week. Monday will see the expiration of a $300-per-week federal benefit that was provided to unemployed people in addition to their regular state jobless assistance after the pandemic. More than 11 million people will lose their federal benefits in 35 states, the District of Columbia, and Puerto Rico when it expires, according to Greg Daco, chief U.S. economics officer at Oxford Economics. 8.9 million people will lose all of their jobless assistance; 2.1million will lose the $300-a week federal check, but will still receive state unemployment aid.
Daco stated that 25 states had stopped federal aid to an additional 3.5million people in order to help the jobless return to work.
According to J.P. Morgan economists Peter McCrory, and Daniel Silver, they found that there is “zero correlation” between job growth and the state’s decision to end federal unemployment aid. They warn that the loss in income due to a reduction in unemployment checks could lead to job losses and possibly offset any gains from encouraging more people back to work.
Chenon Hussey, West Bend, Wisconsin said that “we were a thriving middle class family 18 months ago.” “We are going to be off the map” when federal benefits cease.
Hussey, 42 years old, works part-time for a county government and is trying to revive a small business that specializes in motivational speaking. Hussey’s husband, a master weaver, was laid off three times in the midst of the crisis.
She said that federal benefits have been “the bridge to absolute poverty for us.” Hussey stated that without them, their monthly income would drop by $2800. Their daughter with developmental disabilities will not be able to pay for the intensive care she needs. She may need to be moved to a group home.
Although their cars are now paid off, the mortgage is still a challenge.
She said, “It’s going be a long time before we get through it.” “We can be positive that we are both willing to do the right thing.”
In the week ending Aug. 21, more than 2.7 million people received traditional jobless benefits, a drop of 2.9 million in the previous week. This is the lowest level since the pandemic.
Including federal benefits, almost 12.2 million people were receiving unemployment benefits in the week ending Aug. 14, a dramatic drop from 29.7 millions a year ago.
This is partly due to the fact that more people are working than ever before and not receiving any jobless assistance. It also reflects the cancellation of federal unemployment assistance programs for self-employed and long-term jobless in many states.
In a research note, Rubela Farooqi (chief U.S. economist, High Frequency Economics) stated that “the expectation remains that labor shortages will ease over the coming months as benefits end, and schools reopen.” “Even so,” Rubela Farooqi, chief U.S. economist at High Frequency Economics, wrote in a research note that health risks could impact decisions about school reopenings and return-to-work arrangements.
