Unemployment Claims Rise as Job Rebound Loses Momentum

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Six months into the pandemic-induced economic crisis, the layoffs keep coming.

About 825,000 people filed for state unemployment benefits last week, the Labor Department said Thursday. That figure, which does not reflect seasonal adjustments, is far below the more than six million a week who were filing as layoffs peaked in the spring, but higher than in the worst weeks of many past recessions. Millions are relying on unemployment benefits to meet their basic expenses.

Worse, progress is slowing: Applications for state jobless benefits rose last week, and have been falling only slowly since midsummer.

“Compared to April, they’re trending down, but if you’re comparing to the pre-Covid era they are still so high,” said AnnElizabeth Konkel, an economist for the career site Indeed.

The recent loss of momentum is particularly worrisome, Ms. Konkel said, because restaurants and other businesses that had shifted operations outdoors are likely to begin laying off workers again as colder weather hits Northern states in the weeks ahead.

“We’re losing steam, which is definitely not good heading into the winter,” she said.

In addition to the filings for state jobless benefits, the Labor Department recorded 630,000 initial filings for Pandemic Unemployment Assistance, an emergency federal program that covers freelancers, self-employed workers and others left out of the regular unemployment system. That program has been plagued by fraud and double-counting, and many economists say the data is unreliable.

Credit…Akasha Rabut for The New York Times
Credit…Akasha Rabut for The New York Times

In recent weeks, California and Arizona in particular have reported a flood of fraudulent claims. On Saturday, California announced it would stop accepting applications for unemployment benefits for two weeks while it took steps to cut down on fraud and address other issues.

The data released Thursday suggests that even before that shutdown, California had begun to get its fraud problem under control. The state reported just under 100,000 applications under the program last week, down from more than 200,000 the week before, and more than 400,000 per week in late August and early September.

But for Californians like Stephanie Santiful, the shutdown is a source of frustration and uncertainty.

Ms. Santiful, 37, lost her job as a university librarian in March. After a few weeks, she began receiving $450 a week in state unemployment benefits, plus a $600 weekly supplement from the federal government while that program lasted. It was a bit less than what she had earned while working, but enough to pay her bills.

The supplement expired at the end of July, and last week she reached the end of her regular state benefits. Ms. Santiful should qualify for an additional 13 weeks of benefits under an emergency program created by Congress in March, but she has to apply for them first — and with California’s application system paused, it isn’t clear whether she will be able to do so.

She also has yet to receive the $300 a week in extra benefits that President Trump authorized last month, and doesn’t know when she will get it.

“It’s scary,” said Ms. Santiful, who lives in Lancaster. “It’s scary to not know what to expect. It’s scary not knowing if the country decides, ‘OK, that’s been enough, you’re on your own.’”

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Credit…Alexis Hunley for The New York Times

Ms. Santiful, who has two teenage sons, said she had saved enough to cover rent for October. But after that, she isn’t sure what she’ll do. She said she was considering returning to Virginia, her home state, but doesn’t know how she would afford that.

“I can’t even move back home because I don’t have the money,” she said.

The report on Thursday marked a grim milestone: 27 weeks since the flood of layoffs began in mid-March. In most states, workers qualify for a maximum of 26 weeks of unemployment payments, meaning that workers who lost their jobs early in the crisis have begun to see their benefits expire.

An emergency program established by Congress in March offers an additional 13 weeks of benefits for most workers. And a separate federal program will provide extended benefits after that if the unemployment rate remains elevated. But experts on the unemployment system said there was a risk that benefits for some workers would lapse at least temporarily.

In the meantime, unemployed workers are trying to make ends meet without the extra assistance that helped them earlier in the crisis, particularly the $600 weekly federal supplement.

The $300-a-week stopgap replacement that Mr. Trump ordered, Lost Wages Assistance, was drawn from federal disaster funds sufficient for only six weeks of payments. Because the program is retroactive to the week that ended Aug. 1, it lasted through the first week of September in most states.

Confusingly, many workers have yet to begin receiving payments — or are just starting to get them — because many states took weeks to get the program running. So workers in some states will receive a lump sum to cover retroactive benefits, and nothing more.

Tyler Lindsay worked as an event sales manager at Hornblower Cruises for four years before he was furloughed on March 17, when the pandemic hit and cruise operations ground to a halt. He was permanently laid off on Aug. 17, after the cruise line decided to suspend New York operations at least through the spring.

Credit…Sean Pressley for The New York Times

Mr. Lindsay, 47, received $900 in a lump sum last week from the Lost Wages Assistance program. He expects to receive $900 more this week.

That money, which includes retroactive payments, will go toward the roughly $1,000 in October rent and $250 in utilities for his apartment in the Prospect Lefferts Gardens neighborhood of Brooklyn. But the program’s funding has ended, so Mr. Lindsay will have to look for longer-term solutions.

“Every little bit helps,” he said. “But it’s still not enough.”

After he was furloughed, Mr. Lindsay began receiving $504 a week in New York State benefits, plus the $600 weekly federal supplement. But since the supplement ended in late July, he has used $2,000 of his savings since the pandemic hit to pay for rent and buy groceries, while cutting back on expenses.

“When the $600 was still here, I still felt comfortable ordering takeout or meeting a friend out to get drinks,” he said. “But now I’m a lot more conscious of not being able to do that.”

Mr. Lindsay said he had lost hope of employment in the event industry in New York and was considering moving somewhere like Florida, where he thinks he would have more opportunity to find work at weddings and parties because virus-related restrictions are looser. But the idea makes him nervous.

“Do I want to risk my life and throw myself into a situation where there aren’t proper Covid practices?” Mr. Lindsay asked. “But at the same time, things don’t appear to be getting better here in New York City financially. So it’s a predicament.”

Gillian Friedman contributed reporting.

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