First-time jobless claims rose to 362,000 for the week ending Sept. 25 as enhanced federal unemployment benefits ended, according to government data released Thursday. The report provided the first look at how filing for benefits has changed with the expiration of enhanced federal unemployment benefits on Sept. 6.
California and Virginia led the way, rising by 17,218 and 12,140, respectively, Many in California who are still out of work may qualify for regular state jobless benefits even as two federal programs approved during the pandemic expired, explaining the state’s back-to-back surge in new claims.
For the week ending Sept. 11, recipients of federal Pandemic Unemployment Assistance, which extended benefits to gig workers not normally covered under state benefits, dropped to 1.06 million from 4.9 million.
And continuing claims for federal Pandemic Emergency Unemployment Compensation, which offered payments for workers who had exhausted their state benefits, fell to 991,813 from 3.6 million in the previous week.
As a result, the total number of benefit recipients, including those receiving state benefits, plunged to 5 million from 11.25 million.
The pandemic-related claim numbers will not completely drop to zero in the next several weeks because of backlogs of applications during the pandemic.
The headline initial jobless claims number was slightly below the 13-week moving average of 365,308—our preferred measure—which has been heading toward pre-pandemic levels since March.
While ending the extra weekly unemployment benefits might ease some of the labor crunch, it will have a much greater impact on spending in September.
Even with the choppiness in the initial jobless claims data, we expect jobless claims to continue their declining trend in the coming months as the spread of the delta variant eases and as hiring remains strong.
For more information on how the coronavirus pandemic is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.
