Jobless Claims Surged This Month, Here’s Why

September 11, 2020
Employees walking in office
By leonidkos

As more Americans return to work, it may be concerning that applications for unemployment benefits have risen these past four weeks. During the last week of August, there were 1.59 million jobless claims, but by early September, that number grew to 1.7 million, according to MarketWatch. Just five weeks prior, there were only 1.33 million jobless claims. More than half of these new jobless claims come from California, which may come at no surprise. The state and its occupants’ lives are currently being ravaged by devastating wildfires and the state called for closures of businesses again in response to COVID-19 surges. Read more to see the other factors playing into jobless claim growth.

Worrisome? Yes. But maybe not as bad as it seems. The entire increase in new claims stems from a rising tide of people applying through a temporary federal program. Jobless claims filed traditionally through the states have fallen to the lowest level since the pandemic began.

What’s more, the state of California by itself accounts for more half of these new federal claims.

The federal program was enacted early in the pandemic. For the first time, the government allowed self-employed workers and independent contractors such as freelance writers and Uber drivers to receive jobless benefits. Historically they were ineligible because they did not contribute to the joint state-federal compensation fund as do most companies.

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