Utah’s unemployment claims fall to lowest level during the pandemic

But state officials expect jobless numbers to rise in coming weeks

(Ashley Landis | AP) Kristen McKenna and other volunteers pack boxes of food outside Second Harvest Food Bank on Thursday, Nov. 19, 2020, in Irvine, Calif.

Unemployment claims have declined for the second consecutive week across the country as well as in Utah, although officials warned Thursday the state’s jobless picture is likely to worsen as 2020 winds down.

Nearly 712,000 U.S. residents filed initial claims for state unemployment insurance last week, adjusted for seasonal swings, with 3,519 of them in Utah.

That is Utah’s lowest number of weekly jobless claims since the pandemic started, down almost 20% from the week prior and far below its high in early April of over 33,000 claims in one week.

Similarly, national claims went down for the week ending Nov. 28 by almost 75,000, for a second consecutive week of declines.

While the new trend appears promising, the numbers are “artificially low” given they were measured during Thanksgiving holiday week, according to Kevin Burt, director of the state’s unemployment system.

Seasonal shifts in Utah’s economy and the state’s ongoing rise in COVID-19 cases will probably push unemployment up again in coming weeks, Burt said — even as some kinds of pandemic jobless aid are about to expire.

Utah officials continue to urge those who are currently out of work to seek new employment in sectors less affected by the pandemic.

The state’s unemployment rate, which rose above 10% in early spring during the worst economic impact of COVID-19, was at 4.1% in October, one of the lowest rates in the country.

“Now is the time to actively look for work in industries that have proven to be resilient,” Burt said.

Two emergency federal programs aimed at supplementing regular state jobless benefits are set to go away Dec. 26, including those for so-called gig workers who’ve not been covered by unemployment before and for residents who’ve run out of other types of job assistance.

Without action from Congress, millions will soon be scrambling to make up for those lost funds.

Utah currently has 2,647 workers receiving weekly aid created under a federal program late march for independent contractors and the self-employed, while another 7,634 are getting special extended benefits after exhausting their traditional aid, which can extend for up to 26 weeks.

Burt said state leaders are discussing ways to replace federal money for key unemployment programs with state funds, “but as of now, there are no extensions to it.”

Republicans and Democrats in Washington continue to spar over the size of any new stimulus package, with GOP leaders opposed to the kind of multitrillion-dollar relief effort envisioned by Democrats.

The prospect of vaccines to combat the virus is a hopeful long-term signal, but the economy will face serious challenges until inoculations can begin on a mass scale in the spring, said Michael Gapen, chief U.S. economist at Barclays.

He is looking for a U.S. economic growth rate near zero in the first quarter, followed by a rebound later next year as consumer spending picks up.

“I think the economy is on a solid footing, but we may just hit a couple of bumps between now and the end of the first quarter,” Gapen said. “Stimulus would be helpful, of course.”