Unemployment drop-off reverses course
Americans were starting to fall off the rolls of unemployment. But Thursday's claims report shows the drop-off hasn't just stalled out — the trend continues to reverse course.
Why it matters: Skepticism about the underlying data remains. But economists are still worried about the high level of Americans relying on some form of unemployment benefits, which is once again rising six months after the pandemic hit, even as the economy has reopened.
By the numbers: Roughly 14.5 million workers were collecting benefits under the Pandemic Unemployment Assistance, which provides benefits to gig workers, the self-employed and others with limited work history, as of the week ending in Aug. 29.
- That’s a drop-off from the prior week’s figure, but is still likely overstated.
- A Labor Department spokesperson told WSJ that it's monitoring the PUA program and working with states where some of the numbers appear to be inflated.
Between the lines: A separate program designed to be tapped once regular unemployment benefits have been exhausted hit its highest level since it was established: 1.5 million people are now receiving benefits through that program.
What they’re saying: The rise in people in the extended unemployment benefits program "means ranks of the 'permanently unemployed' continue to increase," Robert Frick, an economist at the Navy Federal Credit Union, said in a statement.
- That — plus the uptick in overall Americans receiving some form of unemployment — "add up to a situation where quick advances in driving down unemployment are stalling, and we can now expect tougher going, especially without more stimulus and a faster decline in COVID-19 cases."
What to watch: New state-level unemployment data is out later this morning. It's the most comprehensive look at how states’ labor markets fared in August.
- 1 stat to go: Here's how quickly the pandemic shifted the ground for states across the country. 18 states both saw their lowest level of unemployment ever and their highest level of unemployment ever this year. (h/t AEI economist Ben Ippolito)