Initial Jobless Claims likely to be higher in coming weeks
Today’s Initial Jobless Claims data spiked into clearly recessionary territory due, in part, to the Emergency Unemployment Compensation Act which provides for extended unemployment benefits in difficult economic times. When the EUC is deployed, individual states send letters to previous unemployment benefit recipients asking them to come into the Labor office to see if they might qualify for the emergency benefit program. Labor officials explained that respondents to the letters found that they qualified for an Initial Claim instead of the EUC program. When asked if it was common for individuals to not claim initial benefits, the Labor official stated that somewhat less than 50% of eligible claimants actually claim benefits.
In short, the implementation of the ECU uncovered a slew of people that are entitled to make an Initial Claim for benefits. A Labor Official expects that more people will be making claims for Initial Benefits in the coming weeks as letters go out from State Unemployment offices seeking to help those whose benefits have run out and finding those entitled to new claims.