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SALT LAKE CITY — The number of Utahns filing for jobless compensation remains at historic levels into the new year.
The Utah Department of Workforce Services reported Thursday the number of total new claims filed for unemployment benefits registered at 5,588 for the week of Dec. 27 through Jan. 2, a 7.7% increase from the previous week. Data showed there were 27,292 continued claims filed during that same week.
"Last week we saw an increase in new unemployment claims as well as in continued claims, both appear to be a direct result of the recently signed Continued Assistance Act extending many of the CARES Act provisions," said Unemployment Insurance Division Director Kevin Burt.
"It is likely the next several weeks will show large increases in claims, however, we believe this is largely a result of people who continue to struggle to reconnect back into the workforce reapplying rather than a large increase in new layoffs."
The near 5,600 weekly claims are five times the average amount the division typically processed a year ago, Burt noted. Claims for the traditional state unemployment benefit were up 7.7%, while the pandemic unemployment assistance — the federally funded program for self-employed and gig workers, is up 37%, he said. The federal extended benefits for individuals who exhaust their state unemployment benefit was also up 11%.
Burt said numerous factors contributed to the inflated claim numbers.
"Holiday weeks are artificially low because there's holidays during the weeks, there's lower volume certain days of the week or around those holidays," he said. "We believe that week it's being compared to was a little bit artificially low."
He said January is historically the agency's highest claim volume month because of the seasonality of work in the winter months.
"There are individuals that apply for unemployment benefits in the month of January because their work no longer can continue with the cold weather, then also the Continued Assistance Act was passed and signed into law on Dec. 27," he said.
During the calendar year 2020, the state processed 387,345 claims for unemployment insurance. By comparison, in 2019, the state saw a total of 57,200 claims. The previous record high for claims was during the Great Recession in 2009, when 164,000 claims were submitted.
"2020 saw over 135% more claims than any year on record," he said "In fact, last year we received nearly six years of claims in a single year."
The total money paid out last year in unemployment insurance benefits hit $1.7 billion, he said, more than 10 times the $150 million in benefits the division distributed in 2019. The previous record for unemployment insurance paid in a single year was in 2010 when the agency paid out about $816 million in benefits — making 2020 109% higher than the record payout a decade earlier, which was equal to about eight years of unemployment benefits being paid out in a single year, Burt said.
"It's certainly evident that the pandemic has been impactful to work, impactful to individuals and has certainly disrupted the economy, but the unemployment (division) has responded by authorizing these much-needed benefits to try and help by flooding in some money that can rejuvenate the economy," he said.
Nationally, the number of Americans seeking unemployment aid fell slightly last week to 787,000, a historically high number that points to a weak job market held back by the viral pandemic.
The Associated Press reported Thursday's figure from the Labor Department, a slight decline from the previous week, shows that even with the pandemic recession in its 10th month, many businesses are still laying off workers. Before the recession, weekly jobless claims typically numbered around 225,000.
The renewed surge in virus cases has caused millions of consumers to avoid eating out, shopping and traveling. And states have imposed new restrictions on restaurants, bars and other businesses. According to the AP, economists at TD Securities estimate that more than half of states are now restricting gatherings to 10 people or fewer, up from roughly a quarter in September.
"Unemployment remains extremely high, although not nearly as bad as it was in the spring, and the pace of improvement in the job market has slowed dramatically from the summer," said Gus Faucher, an economist at PNC Financial. "Job growth should pick up in the spring as vaccine distribution continues, better weather allows for more outdoor activities and states gradually loosen restrictions."
Many economists, along with the Federal Reserve's policymakers, say they're hopeful that once the coronavirus vaccines are more widely distributed, the economy will achieve a broader recovery in the second half of the year.