SALT LAKE CITY — The number of people filing unemployment claims in Utah grew by more than a third in the past week.
But an official with the Utah Department of Workforce Services said the large jump reported Thursday was most likely caused by the start of benefits from the Continued Assistance Act passed by Congress in late December.
The number of total new claims filed for unemployment benefits was 7,630 for the week of Jan. 3 through Jan. 9 — up 36.5% from the prior week, workforce services reported. The total number of new and continuing claims for unemployment stood at 28,458, the report shows.
“One of the reasons why we have seen an increase in new claims is because there were individuals who were on (previous federal unemployment relief payments but) because of that lapse in coverage (last month), they have to reapply for assistance and so that did increase our new claims,” Unemployment Insurance Division Director Kevin Burt said.
The Continued Assistance Act was signed into law on Dec. 27. The primary extensions to the state-run unemployment program are an 11-week $300 stimulus payment, an 11-week extension to the Pandemic Unemployment Assistance for self-employed individuals and an 11-week extension for those who have exhausted their state benefits. All of these programs are now available in the state of Utah.
“It is important to note that the federal unemployment extensions are for a total of 11 weeks. Actively looking for work will remain critically important for long-term stability,” Burt said.
However, that wasn’t the only reason that both the state benefit and extended benefit increased, he added.
“Some of it is the seasonal nature of Utah, the cold weather results in individuals who were working not being able to work because of the seasonal nature,” he said. “January is always our busiest month when it comes to unemployment insurance claims and obviously the pandemic continues to be disruptive as it continues to spread.”
He said vaccines for COVID-19 in the coming weeks should bring the economy back in the warmer months, but for now the state is experiencing continued disruptions to people’s employment due to the pandemic.
“What we’re hopeful of is that the vaccine distribution will provide consumer confidence to address safety concerns. (Growing) consumer confidence will prompt people to continue to spend and continue to participate in other activities, then the economy in Utah will just continue to recover,” Burt said. “But we do expect the next several months to be difficult because the vaccine distribution hasn’t hit everybody and will take months to do so, as well as the cold weather makes the spread of the virus significant.”
Nationally the number of people seeking unemployment aid soared last week to 965,000, the most since late August and a sign that the resurgent virus has likely escalated layoffs.
An Associated Press report indicated the latest figures for jobless claims, issued Thursday by the Labor Department, remain at levels never seen until the virus struck. Before the pandemic, weekly applications typically numbered around 225,000. They spiked to nearly 7 million last spring after nationwide shutdowns took effect. Applications declined over the summer but have been stuck above 700,000 since September.
The high pace of layoffs coincides with an economy that has faltered as consumers have avoided traveling, shopping and eating out in the face of soaring viral caseloads. More than 4,300 deaths were reported Tuesday, another record high. Shutdowns of restaurants, bars and other venues where people gather in California, New York and other states have likely forced up layoffs, the AP noted.
Some states and cities are resisting shutdowns, partly out of fear of the economic consequences but raising the risk of further infections. Minnesota allowed in-person dining to resume this week. Michigan is poised to do the same. Some bars and restaurants in Kansas City are extending their hours.
Economists say that once coronavirus vaccines are more widely distributed, a broader recovery should take hold in the second half of the year. The incoming Biden administration, along with a now fully Democratic-led House and Senate, is also expected to push more rescue aid and spending measures that could accelerate growth.
Yet many analysts also worry that with millions of Americans still unemployed and as many as 1 in 6 small companies going out of business, people who have been hurt most by the downturn won’t likely benefit from a recovery anytime soon.
“While prospects for the economy later in 2021 are upbeat, the labor market recovery has taken a step backward,” Nancy Vanden Houten, an economist at Oxford Economics, told the AP. “We expect claims to remain elevated, with the risk that they rise from last week’s levels.”