Jobless Claims Soar Above One Million Mark Again
August 20, 2020 – The Labor Department reported this morning that 1.1 million more Americans filed new claims for state unemployment benefits last week. Economists were expecting initial claims of 923,000 based on median estimates.
Those collecting benefits for at least two weeks, known as continuing claims, declined by 636,000 to 14.844 million. The unadjusted data, which some economists say is more relevant during times of extreme unemployment, saw a 6.3 percent increase, coming in at over 891,000.
President Donald Trump recently signed an executive order to provide $300 a week in federal unemployment aid, with money taken from a disaster relief fund. Twenty-five states have said they will apply for the federal money, other states are still considering whether to take that step, while two have said they won’t, according to reports.
“This is not a sign of a healthy labor market,” Carl Tannenbaum, chief economist at Northern Trust in Chicago, told the New York Times. “We won’t see a renewal of hiring until the pandemic is under much better control. We have made substantial and rapid improvement in the last three months, but improvement from here will prove slower and more difficult.”
“The modest jump is a stark reminder that claims will likely encounter some turbulence as they fall rather than gliding in for a soft landing,” said Daniel Zhao, senior economist at Glassdoor. “It’s been four weeks without the $600/week CARES Act benefits for tens of millions of unemployed Americans. While a handful of states are approved to disburse the new $300/week benefits, it remains unclear how quickly the benefits will be able to flow to unemployed Americans already facing an unsteady recovery.”
Related: COVID-19 and Its Impact on Human Capital
During the week, 49 states reported 11,224,774 individuals claiming Pandemic Unemployment Assistance benefits and 48 states reported 1,289,125 individuals claiming Pandemic Emergency Unemployment Compensation benefits. The highest insured unemployment rates in the week were in Nevada (24.2), Puerto Rico (21.7), Hawaii (19.9), California (17.0), Louisiana (15.9), New York (15.3), Connecticut (14.0), the Virgin Islands (13.8), Georgia (13.0), and Massachusetts (12.8).
Veteran Recruiters Weighs In
“We’ve seen a good bounce at the top of the market as private equity deal flow has strengthened,” said John Hoagland, partner with New York City-based executive search firm Vardis. “New ownership will always look for leadership teams that can execute their vision. We expect a continued return to work across the board driven by companies’ greater visibility into late 2020 and 2021 commercial activity and the continued phasing out/down of supplemental unemployment benefits extended under the CARES Act.”
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“COVID-19 unemployment has been anything but evenly distributed,” Mr. Hoagland said. “With the upcoming elections, we expect both Republicans and Democrats to break the logjam on job creation legislation to ensure that they are perceived as the go-to party in November.”
“Will all the uncertainty that COVID-19 has brought into our lives, people are spending less money,” said Aaron Wandtke, president of Executive Staffing Solutions. “People have stopped traveling, curtailed their dining out, and have stopped spending money on sports and entertainment. Priorities are starting to shift, and what was once being spent on travel and dining out is now shifting over to home improvements and home gym equipment.”
“We’re also seeing certain jobs and industries becoming more competitive, especially jobs that allow you to work from home,” Mr. Wandtke said. “More employers are seeing potential cost savings by shifting their business models to a more remote-work setting, and this trend is only going to continue.”
Related: 10 Tips for Networking with Executive Recruiters During COVID-19
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media
