50-year low in jobless claims but not just from few layoffs

Many states have imposed stricter rules on their unemployment insurance programs.

  • By CHRISTOPHER RUGABER AP Economics Writer
  • Thursday, April 11, 2019 1:30pm
  • Business

By Christopher Rugaber / Associated Press

WASHINGTON — The fewest people in nearly 50 years sought unemployment benefits last week, a sign of a strong job market and an unusually low level of layoffs.

Yet the decline in applications for jobless aid isn’t due solely to a tight employment picture. Many states have imposed stricter rules on their unemployment insurance programs — from making it harder to qualify to reducing the duration of benefits to cutting payouts.

The combined effect has been to reduce the number of unemployed people who apply for and receive aid, economists say. Nationwide, just 30% of people out of work now receive unemployment insurance, down from about 40% before the Great Recession.

The historically low level of people seeking aid “tells us we have a strong labor market, and that we’ve made policy changes that mean fewer people can qualify for benefits,” said Martha Gimbel, research director at job listings website Indeed.

Weekly applications for unemployment benefits dropped 8,000 to a seasonally adjusted 196,000 last week, the Labor Department said Thursday . That is the lowest level since 1969. The four-week average, a less volatile measure, fell to 207,000, the also lowest point in 50 years.

The decline is all the more remarkable once you take into account population growth. The size of America’s workforce has doubled since the late 1960s to 162 million.

Still, dwindling unemployment claims send a signal of strength about the job market and the economy. Applications for jobless aid typically track layoffs. So the continuing decline — applications have tumbled for four straight weeks — shows that most businesses are confident enough about future customer demand to keep their staffs intact.

That confidence is spurring more hiring, too: Job growth rebounded last month after a sharp slowdown in February, suggesting that the economy remains resilient in its 10th year of expansion.

Early this year, many analysts were concerned that growth was stalling, with the global economy weakening, the Trump administration and China locked in a trade war, and consumers reining in their spending, as the benefits of the Trump administration’s tax cut have faded. Most Americans got a financial boost last year from the tax cut, but it was a one-time bump.

But falling applications for jobless aid indicate that employers foresee an economic slowdown anytime soon.

Another reason for the decline is that long-term unemployment remains much higher than in previous periods when the unemployment rate fell as low as last month’s figure of 3.8%. People who have been out of work for 27 weeks or more aren’t eligible for unemployment insurance.

In March, 21% of the unemployed were out of work for 27 weeks or more. The last time the unemployment rate fell below 4%, in 2000, the proportion was about half that. And in 1969, less than 5% of those out of work were long-term unemployed.

Policy changes have also played a role. Nine states — Florida, Michigan, Kansas, Georgia, North Carolina, South Carolina, Idaho, Missouri, and Arkansas — have cut the number of weeks recipients can receive aid. Florida and North Carolina have reduced it to as low as 12 weeks. Before the Great Recession, every state provided at least 26 weeks.

And some states have taken steps to make it easier for them to cut off people’s unemployment benefits. Michele Evermore, a senior researcher at the National Employment Law Project, an advocacy group for low-income workers, says nearly a dozen states now require that recipients be cut off if they refuse to take drug tests when they apply for job.

Four states — South Carolina, Pennsylvania, Maryland and Nebraska — have also increased the amount of income people must have previously earned to be eligible for unemployment insurance when they lose their jobs.

Other steps make it less likely that people will even apply in the first place. Most states are pushing people to request benefits online and cutting back on staffing at local unemployment benefit offices where someone could get help in person, the employment law project says. That makes it harder for people without internet access to apply.

Research by Moody’s Analytics last year found that reducing the duration of benefit payments discourages people from seeking aid. When North Carolina cut the maximum length of benefits to 12 to 20 weeks, depending on the unemployment rate, from 26 weeks, applications for jobless insurance fell 12,000 a month, Moody’s concluded.

The impact of these steps is evident in the disparity between layoffs and unemployment insurance claims. According to the government’s Job Openings and Labor Turnover survey, layoffs have hovered around 1.7 million a month since 2013. Yet the number of people seeking unemployment benefits each week has fallen by roughly half since then.

“This is more than just a strong labor market story,” Dante DeAntonio, an economist at Moody’s Analytics, wrote in a report last year. “Fewer claims are being initiated for every laid-off worker.”

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.