Another 1.5 million people filed for jobless benefits last week while the overall number of unemployed Americans dipped.
So-called initial claims totaled 1.5 million last week, the 11th consecutive week of declines since the all-time high of 6.8 million at the end of March when states first started closing businesses and issuing stay-at-home orders to stem the spread of COVID-19.
Continuing claims, measuring the total number of people receiving unemployment benefits, dipped to 20.5 million during the week ended June 6 from 20.6 million in the prior week, the Labor Department said on Thursday. In May’s first week, the number reached a record 24.9 million, almost four times the previous high set during the 2008 financial crisis.
Federal Reserve Chairman Jerome Powell highlighted the nation’s elevated number of unemployed people during testimony to Congress on Tuesday and Wednesday. He urged lawmakers to provide additional support to workers who lost jobs because of the COVID-19 pandemic.
A failure to spend now on relief programs would prolong the recession and eat into federal tax revenue in future years, he warned.
Lawmakers are debating whether to pass a fourth COVID-19 relief package that could include an extension of the beefed-up unemployment insurance payments – currently set to expire on July 31. The CARES Act addition of $600 a week to state benefits was an effort to fully replace salaries and keep people current on their bills.
Most states’ unemployment insurance programs only replace about 50% to 60% of salaries, which means people facing an extended period of joblessness may become delinquent on debt payments.
This week, Powell went further than he usually does in urging Congress to support the extension of the beefed-up unemployed benefits. When asked about specific policies during his May testimony to the Senate, he said, “We try to stick to our knitting over here.”
This week, when pressed, he responded: “I think better to keep them in their apartments, better to keep them paying their bills.”