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Unemployment benefits: 898,000 Americans have applied for unemployment

Last week, Americans filed another 898,000 unemployment claims for the first time on a seasonally adjusted basis, according to the Department of Labor. This is more than expected by economists and by 53,000 compared to the previous week.
Weekly receivables have fallen sharply since reaching a peak of 6.9 million at the end of March. But improvements have slowed to snail speed in recent weeks – and reversed last week. That means it could take a long time to get back to pre-pandemic levels of about 200,000 claims a week.

In addition to regular unemployment claims, 372,891 Americans applied for unemployment assistance in a pandemic, a program created in response to the pandemic to help people who do not normally qualify for unemployment benefits, such as the self-employed. This decreased by 91

,000 requests from the previous week.

Adding these together, the total number of applications for the first time was around 1.3 million last week.

IIn California, the state has not yet returned to reporting its actual claims. California has suspended pause processing to address its long lag and introduce additional fraud prevention measures.

The ongoing unemployment claims, which number the number of workers who have applied for benefits for more than two weeks in a row, amount to 10 million. That’s about 1.2 million from the previous week.

This sounds like good news, but economists are worried that ongoing claims may decline because people have increased their allowance. States provide assistance for up to 26 weeks before workers switch to other government programs, such as the emergency pandemic unemployment compensation program.

The number of workers receiving PEUC benefits rose by more than 800,000 to 2.8 million in the week ending 26 September. In all, more than 25 million Americans have received some form of state unemployment benefit.

Billions spent on state aid

Millions of people continue to rely on state aid to make ends meet. But that became more difficult after an additional $ 600-a-week check, which was part of the first stimulus deal, expired in late July.

Still, government spending on unemployment benefits went through the roof this year. It amounted to nearly $ 472 billion in fiscal 2020, which ended Sept. 30, according to the finance ministry. That is growing exponentially from $ 28 billion a year earlier.

Another $ 27 billion was spent on President Donald Trump’s program to help lose wages, which used disaster relief funding to provide another $ 300 a week for the unemployed for up to six weeks. Trump signed an executive order to create the program in August.

So far this month, $ 10.5 billion has been spent on unemployment benefits and nearly $ 4 billion on lost wages, according to the finance ministry on October 13.

The massive rise in unemployment has depleted trust funds for unemployment benefits in the states, forcing them to turn to the federal government for loans.

Twenty countries have borrowed more than $ 36.5 billion to cover their share of payments, which typically last 26 weeks, according to the Treasury Department.

California has $ 14 billion, while New York and Texas have borrowed nearly $ 8.2 billion and $ 4.9 billion, respectively. Virginia and Louisiana have just started borrowing this month. Unemployed people are guaranteed to receive their benefits, regardless of whether countries have to take out loans to pay them.

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