Unemployment claims drop 50% N.C. initial unemployment claims drop 50% with end of federal pandemic programs

The number of North Carolinians filing initial unemployment-insurance claims dropped by 50% last week following the expiration of two key federal pandemic relief programs on Sept. 4.

With no COVID-19 pandemic UI programs available currently for North Carolinians, the U.S. Labor Department reported Thursday the state had 3,557 new regular state claims for the week that ended Sept. 25.

There were 7,110 new state and federal claims in N.C. for the week that ended Sept. 18 that included 3,610 regular state claims.

Individuals determined to be eligible for regular state UI benefits can draw up to 13 weeks - the lowest level offered by any state - that provide a maximum weekly benefit of $350, although the average claimant receives about $235.

By comparison, the state's highest weekly total for claims related to the pandemic was 172,745 for the week that ended March 28, 2020.

As of Sept. 5, nearly 178,000 jobless North Carolinians no longer had $300 in weekly federal benefits to rely on to pay their bills or feed their household.

U.S. Labor listed 33,324 North Carolinians drawing regular state benefits as of Sept. 18.

Pouring salt into an open wound for individuals without work: Once the 13 regular state benefit weeks run out, N.C. claimants have to wait another 39 weeks before they can file again.

The $300 per week extended federal UI payments kept some potential employees on the sidelines since they made more from not working than in a minimum- to low-wage job.

Economists say the September state and county-level jobless reports should provide insight into whether the expiration of the two federal programs will produce an increase in hiring and individuals re-entering the workforce.

"One thing to remember is that although all of the enhanced federal benefits expired, that expiration is for benefit weeks starting after the week ending on Sept. 4," said John Quinterno, principal with South by North Strategies Ltd., a Chapel Hill research company specializing in economic and social policy.

"People with eligible claims for prior weeks still are eligible for benefits for those weeks.

"That might include people who lost a job at the very end of August, or those with prior claims that are pending or under administrative review for some reason," Quinterno said.

The details

In the latest U.S. Labor report, North Carolina was 23rd in the number of unemployment filings, down nine spots from last week.

The extended programs include: pandemic emergency unemployment compensation (PEUC); pandemic unemployment assistance (PUA); federal pandemic unemployment compensation (FPUC); and mixed earners unemployment compensation (MEUC).

As of Sept. 7, North Carolina had received $13.27 billion, with regular state benefits of $2.03 billion, while federal and state extended benefits are at $11.24 billion.

By far the biggest factor in UI benefit payments has been the federal pandemic unemployment compensation (FPUC) program at $7.31 billion. That represents about 55% of all UI benefit payments.

Also as of Sept. 7, there have been 1.54 million individual claims filed in North Carolina during the pandemic, with DES determining that just more than 1 million claimants have been eligible for state or federal UI benefits.

Federal guidelines require a separate application for each unemployment program.

Overall, there had been at least 3.83 million state and federal claims filed as of Sept. 7.

Nationally

National UI claims went up by 11,000 to 362,000 for the week that ended Sept. 25.

The 312,000 claims for the week of Sept. 4 represented the lowest weekly claims count for the pandemic.

There were 5.03 million individuals nationwide with an active claim as of Sept. 11, down 55.3% from 11.25 million as of Sept. 4.

About 2.97 million workers drew state benefits and 2.06 million received federal benefits, mostly extended benefits that have ended for North Carolinians.

Mark Hamrick, chief economist analyst for Bankrate.com, said Thursday that next week's September national employment report "should provide some fresh insights into the delta variant surge's recent impact on the economic recovery and job market."

Gus Faucher, chief economist with PNC Financial Services Group, said Thursday that the expiration of the federal pandemic UI programs and lower benefit payments "will be a drag on consumer spending growth."

"At the same time, these changes to the UI program could also increase job search efforts among the unemployed, helping to alleviate labor shortages in some industries and parts of the country.

"That being said, there was little labor supply response when some states ended their participation in expanded pandemic-related UI programs over the summer, ahead of the national expiration," Faucher said.

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