New, initial claims for unemployment have finally dipped below 1 million since the coronavirus pandemic began, but that's not necessarily a reflection of renewed economic health or hiring.
About 963,000 Americans filed new claims last week according to the Labor Department, down from 1.2 million the previous week, but pandemic response programs are expiring.
From the Associated Press:
The level of weekly applications declined to 963,000, the second straight drop, from 1.2 million the previous week, the government said Thursday. The decline signaled that layoffs are slowing, though the latest figure still far exceeds the pre-pandemic weekly record of just under 700,000. [...]
Some economists say they think the expiration of the $600 benefit has contributed to the drop in unemployment claims over the past two weeks. With jobless aid now sharply lower, some of the unemployed may feel less incentive to apply at all.
Michelle Meyer, an economist at Bank of America Merrill Lynch, says that the loss of the additional aid will reduce Americans’ incomes by $18 billion a week.
It's not a bad thing that new claims finally fell below 1 million, but it's also true that up to a million people literally can't file claims now because the pandemic unemployment program expired.
And this was anticipated. Up to a million or more gig-economy works who were covered only by the pandemic program no longer have access to unemployment. They don't qualify for regular state benefits. The longer the pandemic continues, and the longer congressional Republicans refuse to act, the more people will eventually fall out of being counted at all and I believe we're already seeing that.
Some Republicans may even tell you that's the point. It's like coronavirus testing; if you don't test there's no infection, right? Slow down the testing, Trump says.
What's really unfortunate is that even if improved numbers aren't a sign of real progress, it probably puts another stimulus deal even further out of reach. Congressional Republicans who were already opposed to doing anything will dig in further.
Only three states have agreed to participate in Trump's program for redistributing funds from FEMA to enhanced unemployment benefits, but that program could take up to a month to implement because it will require new software.