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Unemployment benefits

Unemployment benefits: has the claim for payments decreased in September?

An ending of the extra unemployment benefits on Labor Day was supposed to increase employment, but last month saw in increase in first time claimants.

A Now Hiring near the entrance to a Ross department store on September 21, 2021 in Hallandale, Florida.
Joe RaedleAFP

Despite remaining around pandemic lows, initial unemployment claims rose slightly by 16,000 to 351,000 last week. The four-week rolling average declined slightly, which counters the large week-by-week changes.

The claims rise comes as the extra unemployment benefits ended on Labor Day on September 6. A part of this was the extra $300 weekly payment and expansion to the number of weeks unemployed people can claim benefits. With this gone, many long term unemployed are now eligible for very little support.

“What we’re seeing is a labor market that continues to get better but we’re still dealing with high levels of unemployment,” said Gus Faucher, chief economist at Pennsylvania-based PNC Financial Services Group.

With more people vaccinated, businesses have resumed hiring staff, but high levels of covid-19 in the country means there is no certainty that restrictions will not return come the winter.

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How does this compare to pre-pandemic levels?

Current totals are more than 100,000 people higher than they were in 2019. The average for the whole year then was 218,000. In August there were more than 5 million fewer jobs in the US compared to February 2020 on the eve of the pandemic.

Though there are fewer jobs available, the US is in the throes of a remarkable job vacancy crisis. More than 10 million jobs are looking for workers, but people are not willing to take them up. In August, 235,000 people rejoined the workforce, a steep drop-off from the 900,000 newly employed people from July.

These free jobs are one of the reasons why the extra benefits were curtailed. 26 states had already ended the extra federal payments early, citing the belief that they were precluding workers from taking up jobs. However, the evidence doesn't support this. States which kept the payments to their federal conclusion actually saw a slightly faster take up of jobs compared to those that ended them early.

President Biden had called on states to use their covid-19 support funding to continue payments of the extra benefits, but no states took up this offer. Most are keen to try and fill those millions of vacant jobs. The September report, due in the first week of October, will better reflect the impact of the ending payments.


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