Jobless claims drop for first time in a year: ‘That’s important,’ local economist says
WACO, Texas (KWTX) - Initial claims for state unemployment benefits in the US fell to 684,000 in late March for the first time in a year and a Waco economist says, “believe it or not, that’s important.”
In early 2020, as the economy was in its eleventh year of expansion, initial claims were lower than they had been in decades at around 200,000,” said Dr. M. Ray Perryman, principal at Waco’s Perryman Group.
He went on to say there always are some due to the routine churning of the economy.
“‘Initial claims’ sounds like something only an economist could love, and a nerdy one at that,” Perryman said.
“We normally don’t pay much attention to it, but it got more headlines during the pandemic as a weekly barometer for how the economy was faring.
“This weekly statistic represents the first filing for unemployment for a specific claim--basically layoffs or jobs that have recently been eliminated,” Perryman said.
Since records have been kept, the highest numbers ever posted nationwide were at the worst of the 1980s downturn with 695,000 and 665,000 during the Great Recession more than a decade ago.
“That was, however, before the pandemic surfaced,” Perryman said.
For the week of March 7, 2020, initial claims were 211,000 and just two weeks later, on March 28, they were 6,867,000, which Perryman said is “about 10 times the historic high,” he said.
“Through April of last year, initial claims remained stratospherically high, with over 6.6 million on April 4, 5.2 million on April 11, and 4.4 million on April 18,” Perryman said, and nearly 20.2 million initial claims were filed in April, with 12.3 million more in May.
“Those were dark days, and the jobs lost all too often brought tragic human costs including financial distress, failing businesses, or insufficient money for basic necessities.
“Through the summer and fall, millions more initial claims were filed,” Perryman said, “and while some of these filings represent individuals who were dropped, rehired, and then unemployed again, the scope of the disrupted lives is difficult to comprehend.”
To cross below 700,000 new claims finally puts the economy back to a place it’s been before--high by any standard, but not unprecedented, said Perryman and “Equally important, when we have seen this level in the past, we have successfully returned to prosperity in a reasonable amount of time.
“Simply stated, we have done this before!”
The coming weeks could well see initial claims bounce back above 700,000 on occasion, particularly if the recent rise in COVID-19 cases morphs into a fourth surge before vaccinations generate sufficient immunity in the population to permit more normal life.
“Nonetheless, an important milestone in our journey has now occurred.”
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