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Jobless claims in Utah jump more that 20% for two weeks in a row, report says

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The Utah Department of Workforce Services’ South County Employment Center in Taylorsville is pictured on Friday, March 19, 2021.

Jeffrey D. Allred, Deseret News

The number of people seeking jobless benefits in Utah jumped over 20% for the second straight week, according to the latest data from the Utah Department of Workforce Services.

In its Thursday report, the agency said the number of total new claims for unemployment rose to 4,783 for the week of March 28 through April, 3, with a total of 27,261 continued claims filed during that same period — a 20.2% increase, which follows a 27.8% jump the week before.

“A need for the critical unemployment benefit remains as we continue to see some disruption to employment in the state,” said state Unemployment Insurance Division Director Kevin Burt. “However, that need continues to decrease as we have seen continued claims for assistance decrease for nine consecutive weeks.”

The number of individuals who have not requested a benefit for two consecutive weeks as of March 27 was registered at 2,563, compared to a total of 2,046 people who met the same criteria during the prior week.

With the volume of new claims rising more than 20% for two straight weeks, Burt attributes the rather significant increase to determining participant eligibility.

“This is simply a function of the eligibility process leading to an inflated number of new claims,” Burt said. “When a person applies for unemployment insurance, the division does an eligibility decision for that benefit year. If an individual goes beyond a year receiving benefits, they are required to submit a new claim for the new benefit year.

Typically, the unemployment benefit is limited to 26 weeks so this is never an issue. However with the various extensions, some individuals have been on the benefit for a year and now must reapply,” he added. “This process is inflating the numbers as March and April of 2020 were the highest claim volume months, and these claimants are hitting their year mark and needing to reapply.”

Even as continued claims fell for the ninth consecutive week in contrast to the rise in new claims, Burt said there is logic for the seeming juxtaposition.

“When a person receiving a benefit has to reapply, the number of new claims goes up, however it is not an additional person filing a continued claim,” he said. “The continued claim is a better indicator of the ongoing need for the benefit and it is very promising that the number has gone down for nine consecutive weeks.”

He also offered an explanation reconciling the state’s low unemployment rate with the increasing jobless claim levels.

“Any increase in new claims will be artificially inflated as a result of the new benefit year claims,” Burt said. “Continued claims is a better measure to follow to show the ongoing need for the benefit.”

Meanwhile, the number of Americans applying for unemployment benefits rose last week to 744,000, signaling that many employers are still cutting jobs even as more people are vaccinated against COVID-19, consumers gain confidence and the government distributes aid throughout the economy.

The Labor Department said Thursday that applications increased by 16,000 from 728,000 a week earlier. Jobless claims have declined sharply since the virus slammed the economy in March of last year. But they remain stubbornly high by historical standards. Before the pandemic erupted, weekly applications typically remained below 220,000 a week.

For the week ending March 27, more than 3.7 million people were receiving traditional state unemployment benefits, the government said. If you include supplemental federal programs that were established last year to help the unemployed endure the health crisis, a total of 18.2 million are receiving some form of jobless aid the week of March 20.

Economists monitor weekly jobless claims for early signs of where the job market is headed. Applications are usually a proxy for layoffs. They typically decline as the economy improves. Or they rise as employers retrench in response to sluggish consumer demand.

During the pandemic, though, the numbers have become a less reliable barometer. States have struggled to clear backlogs of unemployment applications, and suspected fraud has clouded the actual volume of job cuts.

By nearly all measures, though, the economy has been strengthening. During March, employers added 916,000 jobs, the most since August, and the unemployment rate declined from 6.2% to 6%. In February, the pace of job openings reached its highest level on record. Last month, consumer confidence posted its highest reading in a year.

And this week, the International Monetary Fund forecast that the U.S. economy will grow 6.4% this year. That would fastest annual pace since 1984 and the strongest among the world’s wealthiest countries.

“Jobless claims may bounce around week to week as the recovery takes hold, but we expect they will start to decline more consistently as the economy gains momentum,” economists Nancy Vanden Houten and Gregory Daco of Oxford Economics said in a research note. “We expect the stellar March jobs report to be the first of many and look for a hiring boom in the spring and summer months.’’