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U.S. unemployment claims will decline again when some states end federal aid

Washington – The number of Americans seeking unemployment assistance dropped to 444,000 last week. This is a new low pandemic, a sign that the job market continues to strengthen as consumers are free again, virus infections are reduced and business restrictions are relaxed.

Thursday’s report from the Ministry of Labor is one with a move by almost all Republican governors to cut off the $ 300 weekly federal unemployment benefit, which they and many executives blame for discouraging unemployed people from looking for a job. I am doing it. These cutoffs begin in June. Unemployed people were able to receive a weekly $ 300 benefit in addition to the usual state unemployment assistance.

In addition to terminating federal benefits, most of the same states have also withdrawn from programs that provide unemployment assistance to self-employed or gig workers and those who have been unemployed for more than six months.

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Twenty-two states, from Texas and Georgia to Ohio and Iowa, will end their federal payments of $ 300 from June, according to an Associated Press analysis. Two more states, Florida and Kansas, are considering doing so. All of these 24 states have a Republican governor and a state legislature. According to Oxford Economics, benefits for about 3.5 million people will be reduced in the coming months.

In Oklahoma, Republican Governor Kevin Stitt said this week that the state would end federal benefits on June 26. That was unfortunate news for Gilbert Cruz and his wife, Marissa Enro Cruz, when Tulsa’s graphic design company collapsed. Business since the outbreak of the pandemic.

Both received unemployment assistance under a self-employed program. But even with an additional $ 600 a week of federal aid between the two, they earned more from their business before the pandemic. Currently, they don’t know what they will do. In particular, he is worried about sending his seven-year-old son back to school before being vaccinated.

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“That would mean choosing and choosing an invoice to pay, or putting things off,” Enroclus said. “That means whether we can put food on the table.”

A data release on Thursday showed that unemployment benefits applications were down 34,000 from the 478,000 revised a week ago. The number of weekly unemployment claims (a rough measure of the pace of layoffs) has been steadily declining since the beginning of the year.

The government said Thursday that about 16 million people were receiving unemployment benefits during the week leading up to May 1, the latest period of data availability. This is down from 16.9 million last week, suggesting that some Americans who were assisted found a job.

As the job market steadily recovers from the pandemic recession, consumers are showing more confidence and spending at a healthy rate. Most economists believe that this year’s economic growth will be 7%. This corresponds to the fastest annual growth rate in over 35 years.

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However, the rapid resumption from the pandemic has created a widespread shortage of supplies that has confused what economists wanted to have a smooth rebound. Home construction, for example, plummeted in April as builders suffered from a shortage of timber and labor.

Eliminating $ 300 a week is one of several steps the state has taken to limit or eliminate unemployment assistance and encourage more beneficiaries to seek work. The trend gained momentum after an April employment report released earlier this month showed that employers added far less jobs than expected.

Studies show that about half of the unemployed earn more from unemployment benefits than their previous jobs paid, including a $ 300 federal subsidy each week. An analysis by Bank of America found that people who earned less than $ 32,000 from their previous jobs are now more likely to receive unemployment assistance than their jobs.

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However, some point out that the number of Americans receiving unemployment benefits is steadily declining, as evidence that most of the unemployed are still willing to work when they become available.

“Today’s data show that unemployment aid is not on the sidelines of workers,” said Andrew Stettner, a senior fellow at the Century Foundation. Then go back to work. “

Four months after the pandemic collapsed in July last year, about twice as many as 32 million people received some form of unemployment benefits, which could have been somewhat boosted by fraud. There is. By the end of February this year, about 20 million people were receiving assistance.

Nonetheless, 21 states have said they will also discontinue all benefits for self-employed and gig workers covered by unemployment assistance under the relief package enacted in March last year. They will also drop out of the federal program for those who have not worked for more than 6 months.

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According to the Century Foundation, these moves will end all the benefits of about 3.6 million out of about 16 million people receiving assistance (about one in four current beneficiaries).

In addition, 35 states have reinstated the requirement for unemployed aid recipients to find a job in order to continue to receive benefits. When many businesses were closed and Americans were advised to stay home, the requirement was suspended at the beginning of the pandemic.

In Dayton, Ohio, the work of home painter Terri Ashman and her husband remodeler Steve has evaporated after a pandemic last March. They struggled to get unemployment benefits due to delays caused by the flood of applicants who overwhelmed the labor force in many states.

Eventually, they got help and started saving money. This is partly due to a federal payment of $ 300 a week. By that time, they had moved with Terry’s mother after a period of homelessness.

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They are currently receiving nearly the full $ 8,000 payment required for a new home in Serena near Dayton. They have to pay a year’s rent because of credit problems.

However, the two were largely unsaved and relied on federal payments that continued until September to pay their invoices. Terry Ashman, 54, has just received a second coronavirus vaccination and is suffering from asthma and high blood pressure. She said she was willing to work even at the minimum wage. But first she needs to recover.

“We were finally able to crawl through this hole,” she said. “Without ($ 300) we would live on the edge of a cliff.”

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AP writer Sean Murphy of Oklahoma City and Andrew Welsh-Huggins of Columbus, Ohio contributed to this report.

Copyright 2021 AP communication. all rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.

U.S. unemployment claims will decline again when some states end federal aid

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