U.S., Utah unemployment claims show small improvement, as ‘disruptive’ pandemic drags on

U.S. employers continue to cut jobs at rates that dwarf the pace of layoffs in past decades, even as the economy crawls forward from the coronavirus-induced recession that began last spring.

Utah’s unemployment problems from the pandemic kept improving last week as the state reached its 22th consecutive week of declines in ongoing claims for benefits, but a top state official said Thursday “it is clear the pandemic continues to be disruptive.”

Nearly 4,468 state residents filed new jobless claims in the week ending Sept. 26 and ongoing claims fell to 44,306, down from a pandemic peak of 127,530 the week ending May 2, the state Department of Workforce Services said.

Traditional claims and those filed by independent contractors and the self-employed in Utah both fell last week, DWS reported, but applications from those drawing extended benefits authorized by Congress increased slightly.

Warning that many unemployment benefits will run out at the end of the year, the state of Utah launched a new ad campaign and web portal this week aimed at connecting people out of work or furloughed with available jobs.

Utah officials and industry experts have identified construction, the financial sector, health care, light and advanced manufacturing, information technology and life sciences as the economy’s more promising industries right now. The state estimates there are roughly 30,000 job openings.

And while the UT Job Support campaign has yet to be reflected in the state’s weekly unemployment numbers, Utah’s jobless rate, estimated at 4.1% for August, was less than half the national rate that month, at 8.6%.

The Labor Department reported Thursday that 837,000 Americans filed for state unemployment benefits for the first time last week, a decline from the previous week’s total of 873,000. The figures, adjusted for seasonal variations, are roughly four times the weekly tally of claims from before the pandemic.

But the U.S. totals did not reflect a fresh report from California, where officials have halted processing of initial claims for two weeks to clear a backlog and deal with fraud. Instead, the Labor Department used the most recent weekly figure available.

As bad as the numbers look compared with the start of the year, they are much improved from early spring, when fired and furloughed workers sought benefits by the millions each week. Still, the totals offer little indication of a strengthening labor market nationwide.

“It’s unclear how many companies can sustain themselves and retain payrolls that support incomes,” said Rubeela Farooqi, chief U.S. economist for High Frequency Economics. “A solid rebound in job growth is now looking more muted.”

Across the country, large and small companies alike continue to let workers go. Disney, whose theme parks in Florida and California have been hard hit by a shortage of visitors, said Tuesday that it would lay off 28,000 workers.

Allstate announced plans Wednesday to lay off approximately 3,800 employees, primarily in claims, sales, service and support functions, as part of a restructuring to reduce costs. The cuts constitute about 8% of the roughly 46,000 employees Allstate had at the end of 2019.

Furloughs of more than 30,000 workers by United Airlines and American Airlines began Thursday after Congress was unable to come up with a fresh aid package for the industry.

And with the end of a $600 federal weekly supplement to unemployment benefits in July, consumers have less to spend at businesses struggling to stay open, like restaurants, bars and retail stores.

The Commerce Department said Thursday that personal income declined 2.7% in August, reflecting the cessation of the $600 payments. Many economists said another round of federal stimulus could ease unemployment, but Democrats and Republicans in Congress haven’t agreed on a package.

“Clearly there has been a moderation in the rate of improvement from the early stages,” said Michelle Meyer, head of U.S. economics at Bank of America. “As we get further away from the initial shock, we have less of a natural catch-up, and we face more residual damage.”