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Jobless claims up 1% in Utah, still at record levels

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The Utah Department of Workforce Services’ main administration building in Salt Lake City now bears the name of the late Gov. Olene S. Walker. The building was renamed during a ceremony celebrating the department’s 20th anniversary on Thursday, June 29, 2017.

The Utah Department of Workforce Services’ main administration building in Salt Lake City.

Kristin Murphy, Deseret News

SALT LAKE CITY — The volume of out-of-work Utahns filing for financial assistance is continuing at a historic pace.

The Utah Department of Workforce Services reported Thursday the number of new claims for unemployment benefits registered at 5,006 for the week of June 21 to June 27 — a 1% increase over last week. A total 83,959 weekly claims were processed during the one-week period with claimants receiving $23.7 million in traditional jobless payments, along with an additional $45.7 million of $600 federal weekly stimulus monies distributed, as well as $1.4 million in federally funded extended benefits for an overall total of nearly $71 million in benefits for the week.

“The unemployment insurance program has been an incredible stabilizer for those that have and continue to see disruption to their employment as we move towards economic recovery,” said Kevin Burt, director of the state’s Unemployment Insurance Division. “However, the stability found in unemployment is temporary and about to change dramatically with the loss of the $600 weekly stimulus at the end of July.  We continue to encourage claimants to seek ongoing stability in the many job opportunities currently available.”

The office reported the industries with the highest percentage of weekly claims this week were office and administrative support at 12.2%, management occupations at 9.4% and production jobs at 8.8%. The counties in the Beehive State registering the highest number of Utahns filing new unemployment insurance claims were Salt Lake County at 38.7%, Utah County at 13.6%, Weber County at 7.9%, Davis County at 7.6% and Washington County at 5.3%.

“It’s clear this pandemic is impacting a lot of people still with unemployment in Utah, and the unemployment insurance to date has paid out $905 million in unemployment benefits to those that have been found eligible,” Burt said. “While some industries continue to struggle, what we need to do is connect the job seekers that were working in industries that may be struggling to these other industries that seem to be doing well and are hiring. We hope that this number continues to trend down on the continued claims, especially with the $600 stimulus only being available for four more weeks.”

He noted that approximately one-third of the monies used to pay claimants’ benefits is paid through the state’s Unemployment Trust Fund — which is subsidized through taxes collected from Utah employers. Prior to the pandemic, Utah’s trust fund was ranked the seventh healthiest in the nation and was estimated to last about 18 months without collecting any more taxes, he explained during a weekly news conference.

“Right now, we are about in month four with the unemployment insurance benefits really being impacted, (but) we’re not concerned about the solvency of the trust fund this year,” he said. However, if distributions continue at the current pace, there could be a time in the long-term future where it could potentially be affected, he added.

Meanwhile, the impact the pandemic is having on Utah’s once robust economy has been significant. A local analyst said the ongoing trend of exceptionally high jobless filings is putting a strain on the economy, but there are signs of optimism with more Utahns returning to their old employers or finding new jobs as COVID-19 related restrictions are slowly being lifted.

“There’s some good things to take away from this in that we’re starting to open up things a little bit (and) some people are back to work,” said Andrew Keinsley, assistant professor of economics at Weber State University. “But there’s a long road ahead, for sure.”

He said with so much uncertainty surrounding when or if the coronavirus outbreak will be contained or a vaccine made available, determining a timeframe for economic recovery in Utah or nationwide is nearly impossible to gauge right now.

“The lockdowns were an attempt to mitigate the issues of the virus, but the virus is still out there. As long as we keep seeing these spikes (and) if we don’t get this under control, people are going to be afraid to go out,” Keinsley said. “They’re not going to want to go to restaurants, they’re not going to want to travel, they’re not going to want to do a lot of (activities), and that’s going to keep the unemployment high and that’s going to keep the economy kind of slowly chugging along instead of bouncing back like we hoped it would.”

He also expressed concern about the impact the pandemic is having on state and local budgets. Hearkening back to the 2008 recession, that slowdown caused huge decreases in tax revenue at state and local levels, which forced budget cuts and massive layoffs.

“That was a big drag on the overall (national) economy because we saw this in every state,” he said. “Right now, when I look out there, I don’t see any reason to think that’s not going to happen again.”

However, while he believes the worst of the downturn may already be behind us, there will be bumps along the way to eventual economic recovery.

“We’re going to see a lot of “stop-and-go” types of dynamics where we start to open up, we get a little bit of a spike, then we kind of slow it down a little bit,” Keinsley said. “There’s just a lot of uncertainty out there and that’s going to be the thing that really holds us back.”