Jobless claims drop — or do they?
Trump administration alters methodology as filings definitely decline in Illinois
Labor Department Secretary Eugene Scalia was sworn in by President Trump a year ago. (White House)
By Ted Cox
U.S. jobless claims dropped last week — or did they?
The weekly unemployment report released Thursday by the U.S. Department of Labor claimed 880,000 idled workers filed for benefits last week, down from 1 million the week before and only the second time since the COVID-19 pandemic gripped the economy in March that new claims fell below a million.
But the Labor Department also abruptly altered the way it makes seasonal adjustments — intended to account for predictable fluctuations in the job market, such as teachers returning to schools in the fall and holiday employees being laid off in January. Thursday’s reported stated: “The advance number of actual initial claims under state programs, unadjusted, totaled 833,352 in the week ending Aug. 29, an increase of 7,591 (or 0.9 percent) from the previous week.”
National Public Radio quoted Heidi Shierholz, the chief economist at the Labor Department under the Obama administration, as saying, “It is great they're making improvements in the seasonal adjustment. But the big thing they didn't do that I wished they had done is fix the earlier numbers.”
Regardless, by any measure, new claims remained well above the previous one-week record of 695,000 set during the 1982 recession, as they have since 3.3 million filed for benefits in mid-March. In between, a new record of 6.9 million jobless workers filed for unemployment insurance the last full week of March.
The weekly Labor Department report is based on claims filed with states, and those numbers are delivered unadorned within the report. According to the department, Illinois saw claims decline to 24,000 from 26,000 the week before. Claims for expanded federal benefits for independent contractors, freelancers, and so-called gig workers under the Pandemic Unemployment Assistance program were basically level at 4,400, up just over 250 from the week before.
But that actually bucked the national trend, as claims across the nation for the expanded benefits hit 759,000, up from 608,000 the week before.
“I’m really concerned that the Pandemic Assistance claims are rising,” Gregory Daco, chief U.S. economist at Oxford Economics, told The New York Times. “Altogether you’re looking at 1.6 million filing. It’s pretty bad at this stage in the crisis.
“I feel like this is a very fragile labor market at a critical juncture,” he added.
In Illinois, the Department of Employment Security was formally authorized this week to grant an additional $300 a week to unemployed workers receiving conventional benefits. That was after President Trump moved to fund the extra benefits with $44 billion shifted from the Federal Emergency Management Agency when a $600-a-week stipend authorized under an earlier COVID-19 relief package expired at the end of July.
But state officials have warned that the Illinois slice of that pie will only provide the extra $300 for three weeks, while leaving out an estimated 55,000 workers ruled ineligible under restrictions the Trump administration has placed on the added benefits.
The Labor Department reported that “the advance unadjusted insured unemployment rate was 9 percent during the week ending Aug. 22, a decrease of 0.5 percentage point from the prior week,” but it added that “the total number of people claiming benefits in all programs for the week ending Aug. 15 was 29,224,546, an increase of 2,195,835 from the previous week. There were 1,639,622 persons claiming benefits in all programs in the comparable week in 2019.”